Adecoagro Downsizes Its Dairy Aspirations And Seems More Focused On Value

Adecoagro (AGRO) has struggled over the past year, with the shares down more than 25%. Plunging sugar prices, a weaker Brazilian currency, and concerns about the Brazilian economy are certainly major factors in that performance, but they aren’t the only concerns in play with Adecoagro. These shares have done almost nothing for investors over the past five years (which is at least better than Cosan (CZZ)), as investors have questioned management’s focus on true shareholder value creation.

Recent developments may be a step in the right direction. Not only did management outline a path toward dividends at a recent sell-side conference, but the company is also being more clear about its intentions to grow FCF and be a better steward of shareholder capital, including a significantly scaled-down offer for SanCor assets in Argentina. While there is still ample skepticism regarding this company, the share price seems to reflect a pretty dire long-term scenario.

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Adecoagro Downsizes Its Dairy Aspirations And Seems More Focused On Value