Investcraft – The Art of Investing

OK…so know to the good stuff.  As mentioned, commodities can be tracked by buying ETFs (exchange traded funds) that specialize in agricultural commodities.  The most widely utilized and widely traded of these DBA which trades just like any stock and with same commissions.    Its an index  composed of futures contracts on some of the most liquid and widely traded agricultural commodities  corn, wheat, soy beans and sugar.   There is also a broader, more diversified agricultural index by Jim Rogers of George Soros’ Quantum fund fame which goes by ticker RJA.

These two ETFs are low beta (relative to individual commodities or stocks of agricultural companies), quite stable but also quite boring.  The more exciting, more volatile and potentially higher return way is to combine China and agriculture.   In this category, I recommend CGA which manufactures a vast array of organic liquid feritilizers and serves the Chinese farming community.   From Yahoo Finanace(r), here are some impressive #s:

Enough said, I think.  The current market cap as of August 28 is 230M ish which puts it at a hefty 7 times sales and 20ish PE.  I was discussing this with Ken at around 7.40 to 7.80, and then in the last two months, it kind of ran away!  I am waiting for a good pullback down to $10, but this stock may not come back down that far.

There are also slower growing but larger ADY(American Dairy) which despite its name is a milk and milk products company based in Beijing.  FEED(AgFeed) which is a hog feed company is not as impressive growth wise as CGA.   YGII (Yonge Inernational) is a lesser followed bulletin board (OTC Nasdaq) company which has growth rates/margins/returns similar to CGA but there is less reliable information.

As always due your own due diligence!  These stocks are all out of the ordinary public eye, but CGA seems to have found a following, unfortunately! too soon.