While food and agricultural stocks are often overlooked as investments, many companies offering these products represent excellent value for money. Glenneis Kriel asked a number of investment officers about the opportunities available, and what advice they had for would-be investors.
Traditionally, agricultural and food companies have been treated as the stepchildren of the stock market. Today, however, global supply constraints, combined with rising demand for food and technological developments, have turned many of these companies into attractive components of a well-diversified investment portfolio.
According to Andrew Dittberner, chief investment officer at Old Mutual Private Client Securities, annual shareholder returns for listed energy companies and information technology companies since 2004 have averaged 13% and 10% respectively, whereas returns of more than 100 global listed food and agri companies have averaged about 17% a year. The outlook for the sector is also bullish, as its long-term dynamics are supported from both the demand and supply sides.
“Agricultural commodities are essentials used as food, feed and fuel, and the demand for each of these is bound to increase. On the supply side, both arable land and water are becoming scarcer, which in turn will result in an increased demand for livestock feed,” he says.
TOP AGRI STOCK PICKS
Dittberner differentiates between the commodity derivatives market and the equity market. Agricultural producers, users and investors use the commodity derivatives market, such as Safex, to manage their exposure to prices they may receive or pay for commodities.
Investing in agriculture through the equity market, however, gives an investor exposure to the end-business, the value of which is related to the future profitability of the venture.
He identified Atlas Copco, BASF SE, Deere & Co, Ecolab, Mondi, Unilever, Archer Daniels, Tyson Foods, Zoetis and Agco Corp as some of the companies that have performed well in recent times, and singled out Nestlé and AB Inbev as his top picks.
Denne historien er fra 20 July 2018-utgaven av Farmer's Weekly.
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Denne historien er fra 20 July 2018-utgaven av Farmer's Weekly.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
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Syngenta Seedcare celebrates a decade of innovation
Syngenta's ambition is to enable their customers' investments to grow in healthy soil from treated seeds to young plants through innovation and collaboration, writes Magda du Toit.
Agri workers shine at Western Cape awards
Lindie-Alet van Staden, a garden and olive orchard manager at L’Ormarins Wine Estate in Franschhoek, was crowned as the Western Cape Prestige Agri-Worker of 2024 at a gala event recently held near Paarl.
Small and large farmers recognised at grain awards
The annual Grain SA/Syngenta awards ceremony bears testimony to the quality of farmers in the grain industry.
Growing partnerships: Fedgroup's flexible and innovative approach
Janine Ryan spoke to Warren Winchester, general manager of impact investing at Fedgroup, about why the company became involved in agriculture, and what it offers farmers and their immediate communities.
Why fish farms fail, and how to avoid becoming a statistic
The popularity of launching fish farms is not matched by their success. Leslie Ter Morshuizen, owner of Aquaculture Solutions, explores the factors that cause most of these businesses to go under.
Where history and modernity meet in a luxurious setting
Brian Berkman kept his eyes peeled for ghosts in the oldest continuously run hotel in South Africa, but all he found was a fabulous two-night stay.
THE HITCHING POST
I'm a stylish elderly lady with a radiant glow and a good sense of humour that keeps me young at heart.
Cutworms: check the weeds on your fields!
Zunel van Eeden explains why understanding the ecological interplay between cutworms and weeds is crucial for effective pest management. Producers should disrupt the life cycle of cutworms to minimise crop damage.
Does high-density grazing mimic grazing patterns of game?
In their paper on high-density grazing in Southern Africa, professors Angelinus Franke and Elmarie Kotzé from the Department of Soil, Crop and Climate Sciences at the University of the Free State say high-density grazing systems may not accurately reflect natural ecosystems. Roelof Bezuidenhout reports.
Global grain outlook: 2024/25 marketing season
In its latest summer crops report, the Crop Estimates Committee says South African farmers intend to plant 4,47 million hectares of summer grains and oilseeds in the 2024/25 season, up 1% from the previous season. As South Africa exports maize and soya bean, Annelie Coleman reports on the latest trends in the international grain and oilseed markets, amid fluctuations in weather conditions and ongoing armed conflicts.
