Today for the Friday File I promise to focus on neither gold nor silver, though there are still a few “heavy rotation” gold teasers coming through the floodgates here at Gumshoe Manor (I’ll probably look into a couple of ’em next week, unless something sexier comes up).
No, today it’s all about food — something for which demand is far more certain, though that hasn’t kept entire generations of farmers from going broke when bad luck, bad weather, or overproduction have destroyed profits. And it’s about food in the largest food market in the world (at least in terms of numbers of mouths to feed): China.
We’re looking at a teaser from Bryan Tycango for his Asian Growth Stocks newsletter, which doesn’t get as much attention as the China letters from Robert Hsu and Cabot, but he often teases stocks that are less well-known to US investors (in part because they’re often listed in Hong Kong and more difficult to buy). We only have one review in for this newsletter so far, which you can see here if you’re curious.
So what’s the stock he’s teasing us about today? He calls it a 10-fold potential winner, and it’s a Chinese agribusiness company. Here’s the section of the letter where he shares a few clues:
“My next rags-to-riches reco is a tiny company on its way to becoming China’s dominant agricultural powerhouse
“Food is big business in a country with 1.3 billion mouths to feed, and this company is gobbling up hundreds of tiny, inefficient farms in China each year.
“Then it brings in modern farm equipment, fertilizers, and hybrid seeds, which boosts crop production an enormous 160%.
“This company has already amassed 95,000 acres of farmland, and it’s just getting warmed up. It’s expanding its landholdings 23% a year.
“This simple business plan has brought this company to the favorable attention of the Beijing government.
“Beijing recently granted this company a long-term tax exemption because it wants to increase food supplies
“China’s supply of farmland is shrinking rapidly. Expanding cities, airports, and roads have already paved over thousands of square miles of farmland equal in size to Indiana and California combined.
“As a result, Beijing fears that China’s chronic food shortages are going to worsen. China is no stranger to famine, and Beijing knows that when people go hungry, the result is massive social unrest. So adequate ...