NEW YORK (TheStreet) -- As a value investor, I've been long fascinated by agriculture names, primarily the smaller ones. Some of these companies have long histories, and came to the public markets fairly late in the game.

In some cases, when they did go public, it was not because they desired to be in the spotlight, or wanted to raise capital, but more as a means to create an exit strategy for owners. Sometimes this meant an initial listing on the "pink sheets" where information is typically scarce, and trading is thin.


(LMNR) - Get Report

, which dates back to 1893, (LMNR) is a great example. This relatively unknown company, which left the pink sheets to list on NASDAQ in 2010, happens to be the largest avocado grower in the U.S., as well as one of the largest lemon growers. Limoneira is also a real estate development company, and owned 188 residential units in Santa Paula, Calif., and 1,873 properties in various stages of planning and development in San Luis Obispo, Santa Barbara, and Ventura at the end of last year.

On the agriculture side, Limoneira owns about 5,800 acres of California farmland; including 1,766 used to grow lemons, 1,254 for avocados, and 1,062 for oranges. Total agricultural acreage is the equivalent of 9 square miles of land. A sweetener is the fact that the company also owns water rights associated with the land.

If there's anything compelling about Limoneira, it's the assets, not operating results. The company currently trades for 68 times earnings, and 37 times 2013 consensus estimates. From a revenue perspective, the first nine months of 2012 have been good, up 22.6% over the same period last year, and we'll see if that trend continues.

If you happen to like avocados, then you might also be interested in

Calavo Growers

(CVGW) - Get Report

, a company that has close ties to Limoneira. Calavo, founded in 1924 but did not go public until 2001, markets and distributes avocados and associated products.

In 2005, Calavo and Limoneira executed a cross-equity agreement, in which Calavo acquired a 15.1% stake in Limoneira, and Limoneira became Calavo's second largest shareholder with a 6.9% stake. They continue to hold ownership interests in each other to this day, although Limoneira has somewhat reduced its stake in Calavo over the years.

Other than its stake in Limoneira, Calavo may not be much of an asset play, but it has been putting up some decent numbers. Yesterday, the company announced fourth quarter earnings of 42 cents per share, which exceeded consensus estimates by two cents. Calavo currently trades for about 25 times trailing earnings and 16 times 2013 consensus estimates. The company also yields 2.6%, and its annual dividend, currently at 65 cents per share, has been growing; more than tripling over the past ten years.

I've got to admit I am not a big fan of avocados, but that seems to put me in the minority; certainly in our household. I'd venture to say however, that many investors were unaware that they could actually get investment exposure to the strange, green fruit. At least I think it's a fruit.....

I'll explore additional small agriculture plays in future columns.

At the time of publication the author is long LMNR.

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This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.


Jonathan Heller, CFA, is president of KEJ Financial Advisors, his fee-only financial planning company. Jon spent 17 years at Bloomberg Financial Markets in various roles, from 1989 until 2005. He ran Bloomberg's Equity Fundamental Research Department from 1994 until 1998, when he assumed responsibility for Bloomberg's Equity Data Research Department. In 2001, he joined Bloomberg's Publishing group as senior markets editor and writer for Bloomberg Personal Finance Magazine, and an associate editor and contributor for Bloomberg Markets Magazine. In 2005, he joined SEI Investments as director of investment communications within SEI's Investment Management Unit.

Jon is also the founder of the

Cheap Stocks Web site

, a site dedicated to deep-value investing. He has an undergraduate degree from Grove City College and an MBA from Rider University, where he has also served on the adjunct faculty; he is also a CFA charter holder.