This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

The Plot Thickens For Two Small Agriculture Names

Stocks in this article: ALCO CRESY

NEW YORK ( TheStreet) -- Two small agriculture stocks that I've covered in columns over the past few weeks have been quietly making meaningful moves since those pieces ran. I've got to admit this is a bit out the ordinary for a value investor; where stories typically take months or years to play out, and where following such value related stocks can sometimes be about as interesting as watching the grass grow or paint dry.

Not so this past week for ( Betting on Farmland ) Alico (ALCO), which owns 130,800 Florida acres, primarily devoted to citrus, sugarcane and cattle production. On Friday, the company's top shareholder, Atlantic Blue Group, said it will sell its 50.5% stake in the company to private investment company 734 Agriculture, in partnership with Arlon Group. The purchase price for the majority stake in Alico is $137.8 million, or a seemingly disappointing $37 a share. Alico shares closed at $43 the day before the announcement, and the news sent shares down 11% on Friday. Yesterday, Alico closed at $38.36. ALCO Chart ALCO data by YCharts

It was no surprise that Atlantic Blue wanted out of Alico, those intentions had been made clear quite a while ago. The sale price, however, was a bit of a surprise, at least on the surface. However, it is not uncommon for large, stagnant majority stakes in publicly traded companies to be sold at a discount to smaller stakes. I've seen research that suggests discounts can be in the 30% to 35% range. Applying a 35% discount to 734 Agriculture's purchase price implies a $53 price for Alico shares. What happens from here should be interesting, but I believe that it's possible that Alico will ultimately be taken private.

The other company, Argentine farming giant Cresud (CRESY), has also had an interesting couple of weeks. Shares rose more than 31% in the past two weeks, since my column ran on Oct. 8. That move occurred with no specific company news, but volume that has been above the normal average.

One potential reason the stock is rallying is because of what is happening politically in Argentina. News that President Cristina Fernandez Kirchner is not in good health, and speculation that her ruling Victory Front coalition may lose the majority in the upcoming election may be driving Cresud higher. Kirchner and company have not been friendly to business, and have put forth several anti-free market policies. These include the nationalization of the oil and gas industry, and the implementation of price controls designed to stem inflation, both of which are anti-business. The prospect of end of her reign might bode well for the Argentine markets. Argentine land company IRSA (Inversiones y Representaciones Sociedad Anonima), which is 64.5% owned by Cresud, has also made a nice move the past two weeks, and is up 29% during that period.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,356.87 +288.00 1.69%
S&P 500 2,012.89 +40.15 2.04%
NASDAQ 4,644.3120 +96.4780 2.12%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs