Rocketing prices have made trips to the grocery store a more miserable essential activity than ever. And while it’s natural to think companies involved with bringing food to your table have reaped the rewards, many of those stocks have withered of late. Now though, the dinner bell is summoning investors with three of the market’s best farming stocks to buy at attractively deflated prices.
Inflation is a determined bad actor in 2022’s bearish episode in the financial markets and an eyesore for consumers. But farmers and companies operating in the seed and fertilizer, agriculture, pesticides, ranching and farm animal supply chains have been challenged with headaches, as well.
Jumping labor and energy costs. Supply chain bottlenecks caused by Russia and Covid-19. Rising debt costs. Much needed, but more expensive equipment being put on hold. Consumers tightening their belts. Climate change adversely impacting productivity or a grizzly of a bear market taking no prisoners. All told, even the best farm stocks haven’t proven immune to sell-offs.
While others continue to sow the seeds of fear and doubt to investors, it’s time to consider buying three of the market’s best farming stocks as solid-looking cash cows for your portfolio.
|DBA||Invesco DB Agriculture Fund||$20.36|
|VEGI||iShares MSCI Global Agriculture Producers ETF||$38.86|
Best Farming Stocks: Invesco DB Agriculture Fund (DBA)
Invesco DB Agriculture Fund (NYSEARCA:DBA) is the first of our best farming stocks to buy.
Invesco’s DBA exchange-traded fund (ETF) is the granddaddy of listed agriculture funds. It has been around since 2007, maintains $2.5 billion in net assets and averages a healthy 4 million shares in daily trading volume for liquidity.
And if investors want to do something constructive about the rising cost of that piece of sirloin or the morning cup of coffee, this best farming stock has you covered. DBA stock’s top holdings are up to their eyeballs in food commodities, such as cattle, hogs, soybeans and coffee through futures contracts.
Unlike at your local grocer, there’s a worthwhile sale going on in DBA that should have investors licking their chops. Technically, the weekly chart of this best farming stock reveals DBA has tumbled into an oversold correction with prices outside the lower Bollinger band and stochastics near zero.
Entering Friday, DBA is forming a bullish hammer pattern just above its Covid-related 38% retracement level and “new” up-channel support. This best farming stock is made to order for buyers.
iShares MSCI Agriculture Producers Fund (VEGI)
iShares MSCI Agriculture Producers Fund (NYSEARCA:VEGI) is the next of our best farming stocks to purchase.
iShares VEGI ETF is a who’s who of large-cap best farming stocks responsible for making sure there’s food on the table. From top and diversified names like Archer Daniels (NYSE:ADM), The Mosaic Company (NYSE:MOS) and Nutrien Ltd. (NYSE:NTR), VEGI’s top 10 holdings account for more than 55% of the fund’s exposure. Additionally, a whopping 19.85% of that allocation is in top farm equipment and digital agriculture giant Deere & Company (NYSE:DE).
One modest blemish for this best farming stock is that since rolling out in 2013, net assets are on the lighter side at $322 million. Additionally, trading activity is liquid, but unlikely to win any meme stock awards at an average daily volume of around 120,000.
But as the weekly chart of VEGI shows, much healthier-looking days appear to be in store for buyers.
Technically, investor interest in VEGI stock has grown by leaps and bounds this year. Today, shares are ripe for buyers to sink their teeth into, putting together a bullish hammer reversal into multi-layered Fibonacci and trend support!
Best Farming Stocks: Zoetis Inc (ZTS)
Zoetis Inc. (NYSE:ZTS) is the last of our best farming stocks for investors to buy right now.
Unlike Deere & Co, your granddaddy probably isn’t familiar with Zoetis, but the company has been around since 1952. Just as important to how DE stock ensures the food we eat is available, this best farming stock’s medicines, vaccines and diagnostic products are essential to predicting, preventing, detecting and treating livestock.
ZTS is expensive on many metrics. Its forward P/E multiple commands an above-the-market 35 times earnings. It’s valuation of $84 billion is more than 10 times sales and operating cash flow is on the light side.
Still, it’s often true that the best things in life don’t come cheap. One analyst at Seeking Alpha believes this best farming stock’s Performance Livestock Analytics division is an industry game-changer. And right now, investors do have the chance to make a purchase at longer-term value in ZTS stock.
With shares confirming a well-supported monthly doji hammer and stochastics bullishly aligned in oversold territory to further back investors’ buy decisions, taking a bite has rarely looked better.
On the date of publication, Chris Tyler did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.