Planting An Investment Seed
September and October were dry months across farm country.
As per Bloomberg, nearly 75% of America’s winter Wheat growing area has experienced moderate to intense drought. U.S. Drought Monitor says 84% of the country is in dry conditions, the most in the U.S. Drought Monitor’s 23 year history! Pakistan is under water. Nigeria has its worst flooding in a decade. Europe is experiencing its worst drought in 500 years. Entire regions are becoming unliveable!
This environmental doom and gloom was brought to you by the United Nations “COP27” climate change committee.
I’m very skeptical about weather reporting from the UN and COP27. They are in the business of weather extremism and promoting a green, non-fossil fuel world (at all costs).
One thing we could all agree on, however, is the inherent value in a “miracle seed” capable of growing Wheat (and Soybeans) during dry or normal conditions.
Bioceres Crop Solutions (BIOX, NASDAQ)
$13.80 per share | $860 million market cap
This company has an incredibly long runway. BIOX, still below a billion in market cap and off limits to most large fund managers, can be a home run for patient investors. Barriers to entry are big in this type of business, both in terms of time and money.
Stock has traded mostly in a range between about $11.25 and $15.75 since early 2021. Rising 1,000-day EMA is approaching $11, so great support there. Once this breaks out past $16 to a new all-time high, could really gain momentum.
Bioceres has 40+ years’ history but they’re only now beginning to hit their stride with recent HB4 approval across much of the world.
Having closed their acquisition of Marrone Bio (a BMR recommendation from years back), Bioceres has a portfolio ripe full of “natural” crop protection products. Plus they offer farmers access to crop nutrition, seed, and integrated products.
All told Bioceres has 200+ patents, 400+ products, with a commercial presence in 40 countries.
This is a growth stock. Top line revenues rose 44% in Q4 to $104 million. HB4 revenues rose 94%.
BIOX has been building a base between $12 and $15 for over a year. The stock wants to start making new all-time highs and I’m sure it will, only question is when. Bioceres has a quarterly update Thursday. This could be a catalyst for new highs, but a final spike down on some “disappointing” news would be ideal for buyers.
p.s.
Bioceres continues to impress. Revenues grew 71%, to $127M in the quarter. The company expanded its partnership with Syngenta, upped its buyback program, and is preparing for product launch in Brazil.
+10% / $14.32 early trading hours following the quarterly update.