Adecoagro Finally Getting Its Due As The Street Wakes Up To The Story

You never know when a fundamentally undervalued situation will suddenly flip; the Street can be stubborn and seemingly illogical for frustratingly long periods of time. Whatever made investors finally reexamine Adecoagro (AGRO), I’m glad to see it, as the shares are finally reflecting more of the underlying value that I’ve seen there for a little while. More likely than not, investors are waking up to the realization that 2019 is/was the end of a five-year capex investment cycle that suppressed free cash flow, not to mention some recent positive trends in both sugar and ethanol.

I still think Adecoagro is undervalued, but just not to the same extent as before. I believe the Argentina-related risks are manageable, and I’m fairly bullish on the near-term prospects for ethanol in Brazil. Sugar prices remain a wildcard, but it looks like the balance of factors is tilting more in the company’s favor than it has for a while.

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Adecoagro Finally Getting Its Due As The Street Wakes Up To The Story