Governments worldwide provide $536B in annual subsidies to this one industry — and billionaire investor Mario Gabelli is getting in on the action. Here’s how you can too.

S&P Futures

3,858.75

-31.25(-0.80%)

 

Dow Futures

30,683.00

-239.00(-0.77%)

 

Nasdaq Futures

11,831.00

-102.50(-0.86%)

 

Russell 2000 Futures

1,787.10

-16.30(-0.90%)

 

Crude Oil

82.73

-2.38(-2.80%)

 

Gold

1,671.10

-12.40(-0.74%)

 

Silver

19.35

-0.03(-0.13%)

 

EUR/USD

0.9990

-0.0028(-0.28%)

 

10-Yr Bond

3.4480

0.0000(0.00%)

 

Vix

27.77

+1.50(+5.71%)

 

GBP/USD

1.1376

-0.0047(-0.41%)

 

USD/JPY

143.5500

+0.6440(+0.45%)

 

BTC-USD

18,713.30

-1,176.57(-5.92%)

 

CMC Crypto 200

430.33

-33.11(-7.14%)

 

FTSE 100

7,236.68

-45.39(-0.62%)

 

Nikkei 225

27,567.65

-308.25(-1.11%)

 

Governments worldwide provide $536B in annual subsidies to this one industry — and billionaire investor Mario Gabelli is getting in on the action. Here’s how you can too.

The stock market is a scary place right now. The S&P 500 and Nasdaq are all deep in the red year to date. With raging inflation and an aggressive Fed, the outlook doesn’t seem particularly bright either.

Yet GAMCO Investors chairman and CEO Mario Gabelli still sees opportunities on the horizon — particularly in agriculture.

Don’t miss from MoneyWise

Mitt Romney says a billionaire tax will trigger demand for these two physical assets — get in now before the super-rich swarm

You could be the landlord of Walmart, Whole Foods and Kroger (and collect fat grocery store-anchored income on a quarterly basis)

What do Ashton Kutcher and a Nobel Prize-winning economist have in common? An investing app that turns spare change into a diversified portfolio

“We want to buy agricultural companies,” the billionaire investor tells CNBC. And for good reason. The agricultural industry receives billions of dollars in global subsidies every year.

In 2020, the Organisation for Economic Co-operation and Development found that governments worldwide provide an average of $536 billion per year of direct support to farmers.

Gabelli points to two names he likes in particular from the sector.

Deere (DE)

Commanding over $100 billion of market cap, Deere is one of the largest manufacturers of agricultural machinery and heavy equipment in America. So it’s no surprise that the stock is on Gabelli’s list.

“We like companies like Deere,” he says.

Despite supply chain pressures, Deere’s net sales rose 25% year over year in the quarter ended July 31. At the same time, the company earned a net income of $1.88 billion, or $6.16 per share, marking a substantial increase from the $1.67 billion, or $5.32 per share in the year-ago period.

The stock has also been resilient amid the broad market’s sell-off.

Year-to-date, Deere shares are up 5.5%, in stark contrast to the S&P 500’s double-digit percentage drop.

CNH Industrial (CNHI)

CNH Industrial is a British-American equipment and services company. While the company is not as big as Deere in terms of market cap, its Case and New Holland brands have built entrenched positions in the agriculture and construction machinery industry.

“We particularly like at the moment: Case New Holland,” Gabelli tells CNBC.

“There are 1.3 million shares, the stock is around $12. We think they can earn a buck and a half to $2, within 12 months.”

Indeed, the company has been growing its bottom line. In Q2, CNH Industrial’s adjusted diluted earnings per share came in at 43 cents, up from 37 cents earned in the same period last year.

Consolidated revenue totaled $6.08 billion for the quarter, representing a 17.5% increase year over year. This was driven by a 19% growth in net sales from the agriculture segment to $4.72 billion.

Still, CNH Industrial shares are down 25% so far in 2022. If you agree with Gabelli’s view, the company could be a contrarian opportunity.

More ways to invest in agriculture

Agriculture is a recession-resistant industry. Concerns about a global food shortage have already led to strong prices in agricultural commodities.

For a convenient way to get broad exposure to the sector, check out the Invesco DB Agriculture Fund (DBA). It tracks an index made up of futures contracts on some of the most widely traded agricultural commodities — including corn, soybeans, and sugar.

Investors can also use ETFs to tap into individual agricultural commodities. The Teucrium Wheat Fund (WEAT) and the Teucrium Corn Fund (CORN) have gained 20% and 28%, respectively, in 2022.

Last but certainly not least, you can consider investing in farmland itself. After all, Gabelli isn’t the only billionaire bullish on agriculture: Bill Gates now happens to be the largest private owner of farmland in the U.S.

It’s easy to see the appeal of this asset class: markets can go up or down, but no matter what happens, people still need to eat. That makes farmland intrinsically valuable.

What to read next

Sign up for our MoneyWise investing newsletter to receive a steady flow of actionable ideas from Wall Street’s top firms.

Warren Buffett likes these 2 investment opportunities outside of the stock market

‘Imagine you are laid off’: Suze Orman’s tough-love tips to prepare for the recession ahead

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

Advertisement

Bloomberg

Nvidia Is on Sale and Cathie Wood Is a Big Buyer

(Bloomberg) — A rebound for Cathie Wood’s exchange-traded funds may depend in part on an equally battered large-cap technology stock that’s a long-time favorite of hers — Nvidia Corp. Most Read from BloombergBezos Loses Spot as World’s Second-Richest Person to AdaniTurkey Seeks to Be First NATO Member to Join China-Led SCOBusiness Class for $20,000 Means Staff Fly Coach or Not at AllBiden Says He Warned Xi of Investment Chill If China Backs PutinWhat to Watch as Commodities Traders Prepare for

Bloomberg

Morgan Stanley Quant Sees Capitulation Risk Rising for Equities

(Bloomberg) — The odds of capitulation in stock markets are rising, with macro hedge funds pricing in a more extreme scenario for a global selloff, according to Morgan Stanley’s quant strategists.Most Read from BloombergBezos Loses Spot as World’s Second-Richest Person to AdaniTurkey Seeks to Be First NATO Member to Join China-Led SCOBusiness Class for $20,000 Means Staff Fly Coach or Not at AllBiden Says He Warned Xi of Investment Chill If China Backs PutinWhat to Watch as Commodities Traders

MarketWatch

Fed to put a ‘firm foot on the brake pedal’ this week

The Federal Reserve will put a ‘firm foot on the brake pedal’ of the economy this week in the continuing effort slow demand and therefore cool inflation.

Reuters

Hungarian government says it will submit first anti-corruption bill on Monday to avoid losing EU funds

The Hungarian government will submit the first of several anti-corruption bills to parliament on Monday, its spokesman said, as Budapest scrambles to avoid losing billions of euros in European Union funding. The European Union executive recommended on Sunday suspending funds worth 7.5 billion euros ($7.48 billion) due to what it sees as Hungary’s failure to combat corruption and uphold the rule of law. The European Commission also set out requirements for Hungary to keep access to the funding, including new legislation, which Hungary immediately said it would meet.

MarketWatch

The biggest Fed rate hike in 40 years? It could be coming this week.

Desperate times call for desperate measures, and this might be just such a time: Persistently high inflation might force the Federal Reserve to resort to the biggest increase in a key U.S. interest rate in more than 40 years.

MarketWatch

Our financial adviser says ‘we are locked in’ and the market dropping will not affect us. But she never connects with us unless we call her. Does this sound right?

Question: Our financial advisor set us up for our retirement plan and said we are locked in and the market dropping will not affect us. Proactive adviser-client relationships entail meeting at least once a year, if not two or three times based on client complexity, says certified financial planner Shawn Ballinger at Columbus Street Financial Planning. “Call, make an appointment and come up with a communication plan that works for both you and your adviser,” says certified financial planner Don Grant.

Bloomberg

Pakistan’s Largest Fuel Retailer Planning to Build $500 Million LNG Terminal

(Bloomberg) — Pakistan State Oil Co., the nation’s largest fuel importer and retailer, is planning to build a $500 million LNG terminal as part of its strategy to diversify into multiple businesses.Most Read from BloombergBezos Loses Spot as World’s Second-Richest Person to AdaniTurkey Seeks to Be First NATO Member to Join China-Led SCOBusiness Class for $20,000 Means Staff Fly Coach or Not at AllBiden Says He Warned Xi of Investment Chill If China Backs PutinWhat to Watch as Commodities Trader

Leave A Reply

Your email address will not be published.