Cresud (CRESY:US), Part II

Tags

Argentina, BrasilAgro, Cresud, Debt/Assets Ratio, Elsztain, farmland, IRSA, Margin of Safety, Owner-Operator, Price/Book, value investing

Cresud (CRESY:US)

Mkt Price:  USD 11.30

Mkt Cap:  USD 561.1 mio

Debt/Assets %:  12.7%

P/B:  0.35  (adjusted)

Fair Value:  USD 32.66

Upside Potential:  189%

Continuing from my previous Cresud post:  CRESY has a tough B/S to tackle. First, it’s denominated in Argentinean Peso (4.2620 ARS per USD), a fairly stable…but potentially very unstable currency, second, it wildly understates many assets which are carried at cost, and third, it consolidates listed entities (IRSA (IRSA:AR), and also BrasilAgro (AGRO3:BZ) going forward) in which Cresud has a controlling and/or majority stake. My approach to dealing with this is to construct a B/S and Fair Value on a ‘look-through’ basis. There are a number of components to work through:

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Cresud (CRESY:US) & Irish Farmland

Tags

Argentina, BrasilAgro, Cresud, farmland, Ireland, IRSA, pampas

Cresud (CRESY:US)

Mkt Price:  USD 11.28

Mkt Cap:  USD 560.1 mio

Cresud is a leading Argentine agricultural company engaged in the production of basic agricultural commodities. It also has a growing presence in the Brazilian agricultural sector through its investment in BrasilAgro (AGRO3:BZ). Cresud is currently involved in a range of activities including crop production, beef cattle raising and milk production. The Company’s business model, which it seeks to roll out abroad, taking into account the specific conditions of each country, focuses on the acquisition, development and exploitation of properties having attractive prospects for agricultural production and/or value appreciation and the selective disposition of such properties where appreciation has been realized. Additionally, a majority of Cresud’s current market value is actually represented by the quoted value of its controlling stake in IRSA (IRSA:AR), Argentina’s leading listed real estate company. Cresud’s shares are listed on the Buenos Aires Stock Exchange and its ADSs are listed on NASDAQ.