Seeking Alpha: Better Times, Worse Times For Cresud

I'm pretty happy with the calls I made on South American agriculture companies back in July of this year. As I discussed yesterday, Adecoagro (AGRO) is up nearly 20% from my Alpha-Rich call, while BrasilAgro (LND), my least favorite of the four, is down more than 10%. SLC Agricola (OTCPK:SLCJY) has been something of a disappointment, up only about 5%, but my high-risk/high-reward call Cresud (CRESY) laps the field with a better than 40% return from my initial recommendation.

Cresud is in a tricky spot. On one hand, the end may well be in sight for the Kirchner brand of Peronism and that should be good for Argentina's economy. On the other hand, Argentina's economic history generally suggests that a change in government is more of a distinction without a difference. Elsewhere, I believe Cresud's land values are likely understated and that the company is unlikely to see the same bad weather that has hurt yields in recent yields, but farming is inherently unpredictable and the problems in Argentina are restricting the company's growth and value-creation potential.

On balance, Cresud is still undervalued. Its undervaluation is roughly on par with that of Adecoagro, and choosing between the two seems to me to be more a matter of whether you prefer larger upside or smaller downside.

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Better Times, Worse Times For Cresud

Seeking Alpha: Cresud Is Confounding, But Trading Much Too Far Below Fair Value

Having given overviews of South American agricultural companies SLC Agricola (SLCJY.PK), Adecoagro (AGRO), and BrasilAgro (LND), I close the tour with Argentina's Cresud (CRESY). I'd like to say that I left the best for last, and maybe I have, but I think it's closer to the mark to say that I've left the most confounding one for last.

Make no mistake, Cresud has a lot of worthwhile assets, including productive farmland in four South American countries, a controlling stake in a significant Argentine real estate developer, and a major stake in BrasilAgro. At the same time, though, Argentina is going through another bout of significant political and economic turbulence, and I don't think anybody can say that means for agricultural exports out of Argentina, land values within the country, and/or the company's ability to pay cash dividends to foreign shareholders.

Assuming that nothing dramatic changes regarding the operating framework for the company in Argentina (and Brazil) and that land values stay strong, Cresud could well be the cheapest of the four companies I've surveyed. At a minimum, it's definitely the most diverse collection of assets.

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Cresud Is Confounding, But Trading Much Too Far Below Fair Value