agri-business, Avangardco, Baker's Dozen, Big Bird, Black Earth region, Cal-Maine Foods, Cherkizovo, Cresud, eggs, Eurobond, hryvnia, MHP, Oleg Bakhmatyuk, Sprott Resource Corp, Ukraine, Ukrlandfarming
I’ve recommended Avangardco in my Baker’s Dozen for 2012, but with their recent results and share price acceleration it’s time for a complete write-up. My Black Earth articles, here and here, are helpful background also. This Black Earth interest came about when I began i) seeking agricultural plays on the increasing global demand for protein as living standards improve around the world, which evolved into ii) identifying the most fertile farmland, generally accepted to be the Black Earth region of Ukraine & Russia and the Pampas of Argentina (followed by the Canadian Prairies), and iii) finding the cheapest (but acceptably fertile) farmland globally.
I was delighted to discover the most fertile farmland coincided with some of the cheapest farmland globally, a happy accident of history! I discarded Canada due to its higher cost (and the only farmland opp. I found was Sprott Resource Corp (SCP:CN), which is more of a commodity play). In Argentina, however, I discovered the perfect farmland (and property) company to invest in! Please read here, I now have a 2.8% portfolio stake in Cresud (CRESY:US). This left me with Russia & Ukraine: Farmland companies here have v large (and cheap) land holdings, but suffer from negative cashflows and the obvious need to raise cash from investors…