James Dennin, Kapitall: We looked for undervalued agriculture stocks – from ranchers to dairies – by looking at levered free cash flow. So cows have not, nor ever been, trendy investments. One hedge fund manager would say the last good year was 1865. And yet this seems surprising to me, because in America, we eat lots of meat. About twice as much as the typical person worldwide. We continue to eat lots of meat even as we learn more and more about how red meat is bad for our health, or that it pollutes more than cars. Read more from Kapitall: Alternative Energy Stocks: Getting Warmed Up Or Already Close to the Sun? The main thrust of the problem has to do with cost of production. The science behind livestock grows more sophisticated by the day - so much so that most cows now receive personalized food allotments and genetically complimentary mates found in catalogues. And you can imagine what that kind of dating service costs. But as the team at Planet Money found, even genetically-modified super-cows aren't very good at generating much profit, at least when you compare profit with the hours most farmers typically work. Investing ideas And yet that might be starting to change. Meat output in the US has stayed steady over the last ten years – but the value of that output had almost doubled over the same time. If the price continues to go up while the supply remains so steady, it's easy to imagine beef becoming more like a commodity, if it's not already. One small acknowledgement of this trend is that the Department of Agriculture began keeping track of the price of premium, "grass-fed" beef this fall. So in case there really is gold in them thar steaks – we decided to look for undervalued stocks in the meat and dairy industry. To do that we looked at the levered free cash flowto enterprise value (LFCF/EV) ratio among these agriculture stocks, which measures how much debt-free cash a company brings in relative to its size. There were three companies who see value in beef that made it through our screen.