Strong Productivity And Asset Management Bode Well For SLC Agricola

It's been a while since I've written about SLC Agricola (OTCPK:SLCJY), and the shares have had quite a ride since then, trading up as much as 30% relative to the price at that last article before starting a downward slide that now has the shares trading about 20% below where they were last year. While they're all different companies, that net performance largely mirrors the disappointing performance at Adecoagro (AGRO) (which does some farming, but is predominantly a sugar/ethanol company), and significantly lags the performance of other Brazilian ag/sugar/ethanol players like Cosan (CZZ), Sao Martinho, and BrasilAgro (LND).

Commodity companies are difficult in general, and agricultural commodity companies are even more difficult given the significant impact local/regional weather can play (among other factors). At SLC, though, I think the company's consistent superior productivity must factor into the valuation as well as management's strategy to go asset-lighter and conduct more sale/leaseback transactions. I see fair value in the $5.25 to $6.25 range, though I would note the liquidity on the ADRs isn't great.

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Strong Productivity And Asset Management Bode Well For SLC Agricola