There’s plenty of stories out there about ASX companies cashing in on the “dining boom” to feed investor returns, but I think these two under the radar agricultural stocks are something to go nuts about.
Select Harvests Limited (ASX: SHV)
Almond producer Select Harvests Limited is having a cracker 2018 crop harvest – announcing yesterday quality and sizing is consistent with expectations, despite some issues with frost in its NSW orchards.
Select Harvests exports its nuts and seeds products across Australia, Asia, Europe and the Middle East at present, with more global expansion expected in the future as the global consumption of almonds continues to grow – especially in Asia.
Select runs a geographically diverse orchard portfolio to mitigate against weather conditions that could impact harvest output, with sales already committed for 45% of the current harvest and 34% of its orchards yet to mature to keep some crops up its sleeve when global demand increases.
The demand for plant-based food is on the rise across the world and Select seems pretty intent on making itself known as a reliable provider in the nuts and seeds space with the company continuing to seek mature orchards to acquire to underpin its export focused strategy.
The Select share price was at $5.60 at the time of writing up almost 3% and only slightly down from its $5.64 share price at this time last year.
Webster Limited Fully Paid Ord. Shrs (ASX: WBA)
Walnut producer Webster Limited has seen its share price tracking upwards slowly in the last 12-months, from $1.45 at this time last year to an April 11 close of $1.52.
Webster focuses on the export of in-shell walnuts, onions and counter-seasonal foods to northern hemisphere markets, with the recent acquisition of an almond property in NSW for $16.8 million bolstering its portfolio.
The acquisition of Sandy Valley almonds brings some diversification to Webster’s portfolio, with the hope it will complement the existing walnut operations to assist to increase global operations and export potential.
A quick scan of some of Australia’s successful agricultural stocks with more runs on the board than the above includes livestock, feed and wool processor Elders Ltd (ASX: ELD), which has diversified its offerings to include real estate & financial planning to rural customers across Australia and New Zealand.
The Elders share price has shot up 79.7% from its $4.45 price at this time last year to its April 11 close of $8.00 as the company this month announced retail and acquisition growth after gobbling up crop protection company Titan Ag and independent livestock company Kerr & Co Livestock.
Elders will also divest its feed and processing assets from its Indonesian subsidiary portfolio, PT Elders Indonesia as part of its strategic direction, freeing itself from the high cattle costs and Indonesian government policies that plagued the operation.
Other agricultural companies to keep an eye on include Nufarm Limited (ASX: NUF), Australian Agricultural Company Ltd (ASX: AAC) and Ruralco Holdings Ltd (ASX: RHL) all of whom have experienced some share price volatility in the last year which could signal buy opportunities for those looking for an in.
Many agricultural investments, particularly nuts, are long-term options only, so if you’re looking for quick returns these players aren’t likely to be your cup of tea. However, speculative investors seeking long-term growth might be interested in buying in before these company’s get too much bigger as the move to plant-based eating dominates the dieting world globally and overseas produce buyers favour Australian food providers.
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Motley Fool contributor Carin Pickworth has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Elders Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.