Agriculture Technology

1. Zoetis Inc (ZTS)
No of HFs: 58

Dollar Value of Hedge Fund Holdings: $2.25 billion

ZTS ranks #1 in our list of the best agriculture technology stocks to buy. Zoetis is the world’s largest medicine and vaccine producer for animals and livestock. It was spun out of Pfizer and today its market cap is nearly 40% of Pfizer’s market cap. As consumers spend more and more money on their pets ZTS shareholders will benefit. We also know that global meat consumption has been increasing secularly and dramatically ((more than 400%) over the past 50 years. Rising incomes and growing populations in poorer parts of the world will continue to support this trend and ZTS will definitely continue to benefit from this.

According to Insider Monkey’s hedge fund database, William von Mueffling’s Cantillon Capital Management has the number one position in Zoetis Inc (NYSE:ZTS), worth close to $482.8 million, amounting to 4% of its total 13F portfolio. Coming in second is Marshall Wace LLP, led by Paul Marshall and Ian Wace, holding a $380.4 million position; 2.4% of its 13F portfolio is allocated to the company. Remaining professional money managers with similar optimism encompass Nicolai Tangen’s Ako Capital, Barry Dargan’s Intermede Investment Partners and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Intermede Investment Partners allocated the biggest weight to Zoetis Inc (NYSE:ZTS), around 5.98% of its 13F portfolio. Bristol Gate Capital Partners is also relatively very bullish on the stock, dishing out 4.59 percent of its 13F equity portfolio to ZTS.

2. Ecolab (ECL)
No of HFs: 52

Dollar Value of Hedge Fund Holdings: $2.3 billion

Ecolab is a global specialty chemicals and life sciences company. It generates most of its revenue from its water, food and beverage, downstream, and paper businesses. ECL also has a smaller pest control and textile unit that accounts for less than 10% of its total revenue.

At the end of the third quarter of 2020, a total of 52 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 13% from the previous quarter. By comparison, 42 hedge funds held shares or bullish call options in ECL a year ago. Hedge funds have never been his bullish on ECL before. The largest stake in Ecolab Inc. (NYSE:ECL) was held by Bill & Melinda Gates Foundation Trust, which reported holding $872.6 million worth of stock at the end of September. It was followed by Cantillon Capital Management with a $440.2 million position. Other investors bullish on the company included Impax Asset Management, AQR Capital Management, and Markel Gayner Asset Management.

As industrywide interest jumped, key hedge funds have jumped into Ecolab Inc. (NYSE:ECL) headfirst. Holocene Advisors, managed by Brandon Haley, created the largest position in Ecolab Inc. (NYSE:ECL). Holocene Advisors had $45.7 million invested in the company at the end of the quarter. Josh Donfeld and David Rogers’s Castle Hook Partners also made a $24.2 million investment in the stock during the quarter. The other funds with new positions in the stock are Mikal Patel’s Oribel Capital Management, Michael Cowley’s Sandbar Asset Management, and D. E. Shaw’s D E Shaw.

3. Deere & Company (DE)
No of HFs: 42

Dollar Value of Hedge Fund Holdings: $1.3 billion

We previously highlighted DE in our Top 10 Robotics Stocks To Buy list. Cathie Woods’ ARK Invest has a large position in Deere. Here is what First Eagle said about DE in its 2020 Q3 investor letter:

4. Bunge Ltd (BG)
No of HFs: 41

Dollar Value of Hedge Fund Holdings: $701 million

Bunge Ltd (NYSE:BG) is a diversified agribusiness company that is involved in acquisition, sale, storing, transportation and processing of grains and oilseeds that is used to produce protein for animal feed and edible oil products for commercial customers. It is an essential part of the global food chain. It is also involved in production of ethanol and selling of fertilizers. In Q4 Bunge said it would sell its refinery in Rotterdam to Neste Corporation for 285 million euro ($345.5 million) in cash. The deal is expected to close in the first quarter of 2021 and the facility will be then leased from Neste in phased transition that is expected to be completed by 2024.

5. IDEXX Laboratories, Inc. (IDXX)
No of HFs: 41

Dollar Value of Hedge Fund Holdings: $545 million

Shares of IDEXX Laboratories, Inc., a veterinary diagnostic company, gained after reporting excellent quarterly results that exceeded expectations, despite the headwinds caused by the pandemic. Organic growth in IDEXX’s core companion animals group finished the quarter up double digits, and the company repurchased almost $200 million of stock in the quarter, its highest level in many years. Although visits to veterinary clinics fell approximately 30% during the peak of lockdowns, management indicated that trends “meaningfully improved” during the second quarter. To be prudent, management committed to reduce corporate expenses by $100 million, increased its cash position, and temporarily suspended future share repurchases. We believe the results demonstrated that IDEXX is a unique, competitively advantaged business that is likely to bounce back quickly and outperform across economic cycles.”

6. FMC Corporation (FMC)
No of HFs: 41 Dollar Value of Hedge Fund Holdings: $526 million

FMC Corporation ranks 6th in our list of the best agtech stocks to buy. FMC Corp (NYSE:FMC) is a chemicals company with a focus on agriculture. FMC shares returned around 20% in 2020 as FMC Corp managed to beat the earnings estimates for at least the past four quarters, although it missed revenue expectations for the last two. FMC also recently updated its 2020 Q4 outlook. FMC expects to generate around $500 million in free cash flow in 2020. The company also guided for 7% organic revenue growth for 2020 and 5-7% revenue growth for 2021.

"Despite the global pandemic and these near-term operational challenges, we delivered a solid 2020 and remain highly confident in our 2021 outlook and our ability to deliver FMC's long-range growth plan targets," said Mark Douglas, FMC president and CEO.

7. McCormick & Company (MKC)
No of HFs: 37 Dollar Value of Hedge Fund Holdings: $316 million

MKC ranks 7th in our list of the best agriculture technology stocks to buy now. McCormick is in the spice business. Even though its shares declined more than 30% in March, the stock quickly regained its value as consumer were forced to cook at home and use more of MKC's spices. MKC recently purchased FONA International for $710 million. According to the company's website "FONA creates and produces flavors for many of the largest food, beverage, and nutritional companies in the world. A unique proposition in the flavor industry, FONA prides itself on a high-tech, high-touch vision — helping customers grow through both cutting-edge technology and personal customer service."

8. Corteva Inc (CTVA)
No of HFs: 36 Dollar Value of Hedge Fund Holdings: $1.1 billion Corteva ranks 8th in our list of the best agriculture technology stocks to buy now

“When Corteva was spun off on June 1, 2019, DuPont shareholders received one share of Corteva for every three shares of DuPont which they owned.

Corteva, meanwhile, produces specialized agriculture chemicals which have FDA approval (similar to prescription drugs) and maintains a duopoly position in the domestic seed market (Bayer AG ADR (OTC: BAYRY) and Corteva control roughly 60% of the domestic market). The company begins its new life with $14.3B in global sales, $2.8B in EBITDA, and expected growth of 6%-10%. The mechanics of Corteva’s spin-off left the company with cash on the balance sheet which should exceed $2B by the end of 2019 and make the company attractive in an agricultural industry which has seen a lot of merger activity over the past several years. We see every reason to continue to hold Corteva and, if possible, take advantage of that activity in the future.”

9. Tyson Foods (TSN)
No of HFs: 36 Dollar Value of Hedge Fund Holdings: $618 million

TSN ranks 9th in our list of the best agriculture technology stocks to buy now. Arkansas-based Tyson is the second largest processor of meat, chicken and pork. In December 2020, Tyson Foods shares reached a nine-month high after Piper Sandler analyst Michael Lavery upgraded the stock to Overweight from Neutral with a $77 price target, upped from $70. The analyst said that the market has not priced in the upcoming recovery in the food services sector following the coronavirus vaccines. Tyson has a solid exposure to the food services and restaurant sector.

''“The stock of one of the largest processors of chicken, beef and pork in the world, is down by more than 22% since the beginning of the year as the company has been hit hard by the pandemic with several facilities closed over outbreaks. However, Tyson posted better than expected EPS and revenue for the last quarter and provided a strong full year-guidance, saying that it expects strong performance of its Beef and Pork segments and growth in Chicken and Prepared foods segments. Recently, Piper Sandler upgraded Tyson Foods, Inc. (NYSE:TSN) to Overvweight from Neutral and raised the price target to $77 from $70. The analyst suggested that a reopening of the economy as a vaccine is released will boost food service sales, although eat-at-home trends will also remain strong.”''

10. Conagra (CAG)
No of HFs: 35 Dollar Value of Hedge Fund Holdings: $770 million

Conagra Brands Inc.(CAG), is a packaged food company that produces different varieties of products. The company makes and sells products under separate brands that can be availed in a food service establishment.

Source: https://finance.yahoo.com/news/10-best-agriculture-technology-stocks-143753355.html Jan 22, 2021