 Good day, fellow investors. Today I want to discuss a very, very interesting agricultural stack. If you're looking to protect yourself from whatever is going on in the world, if you go towards land, towards agricultural commodities, you know you're safe because that's the most defensive sector. So let's look at adecuagro, a Brazilian-Argentinian play with a lot of land in Argentina that might give you that exposure to agriculture you're looking for in your portfolio. Therefore, this is a stock to watch if you're looking for something like that. The key with the company is it is really a low cost producer of food. Okay, a little bit of renewable energy but starting with sugar and then now going into milk. One of the lowest cost potential producers in the world. It has 122,000 hectares owned land. It has own handling, storage processing, positive track record of land development, low cost production and also sugarcane crushing capacity for ethanol and sugar. Over the past it has been a really a growth story, a little bit less land growth but since 2011 listed on the New York Stock Exchange and there has been nothing other than growth despite whatever has been going on in the sector. Most of the plants are in Argentina of course, they have mills, free mills, storage and of course agricultural production. They want to mostly expand by doing organic growth but they're also trying to acquire the biggest milk processor in Argentina so that's also something interesting. As I said the key is the cost and they have the lowest cost of producing sugar in the world so that's very very competitive. No matter what goes on with the sugar prices up, down, left or right, adecuagra will always lead to profits and lead you to safety when you invest in it. There are their competitive advantages, low competition for land in Argentina. It's not really that you can grow something else there in place of sugar or having cattle, continuous harvest etc etc. Also for the dairy business also very low cost if they can improve the efficiencies in their new acquisition then they can match the New Zealand cost producers and therefore have a low cost product to export around the world similarly as they're doing with the sugar. In the past they did well, they generated over 300 million in cash from the transformation of land which is also something to keep in mind as the capital gains are 200 million that is not bad given the current market capitalization. A little bit on the numbers, the growth has been there, good growth, 12 percent year per year over the last 10 years, the sales diversification 50 something percent more on sugar depending on where it goes, where the mix goes to ethanol. This quarter they have increased the ethanol mix because of higher ethanol prices and low sugar prices. Ethanol was about 19 cents, sugar is about 12 cents so it pays to produce more ethanol and the rest is well diversified across soybean, corn, wheat, rice, dairy and others. Also EBITDI has been growing constantly and has reached significant numbers. What's also significant here is that corporate costs have been stable and declining which shows that the management is now not over expensive and really focused on generating wealth for shareholders, which by the way they also are and the management has 6.2 percent in the company and they are one of the top five shareholders. Shareholders, the leading shareholders is the Qatar Investment Authority, PGGM, Firmohansbehare and then we have the management. So this sounds like a great story, let's see about the numbers behind it. The financials, you don't see that big financials because they have a lot of finance costs here that destroy the margin from EBITDA to gains but also something very important to note that lowers the book value so you see a price to book value that's 1.5 but it's actually much lower because a lot of their functional currencies of the subsidiaries are in the Argentinian Peso or Brazilian Real which means that they are much higher in dollars and that has an effect on the balance sheet. So the equity is 640 million to shareholders, book value 5.5 dollars, 1.57 price to book but you have to add the land value to that and the land value is 900 million and if you bring it back to the balance sheet you can see that everything that they own is 820 million but actually the land is should be around 900 million so there should be at least added I would add the 500 million that they have in accumulated comprehensive losses to the calculation of the book value so cumulative translation adjustment 541 million so that's something to add that's about four dollars per share plus increases in the value of land so we are definitely at the book value of around 9.5 ten dollars which makes it this which makes this below book value acquisition now the key with this company is the cash generation which is very high net cash generated from operating activities we are at 240 million let's say the average will be around 200 million over the ups and downs cyclicals in sugar and ethanol and then you have a company that is giving you 1.6 dollars in operating cash flows the debt is pretty high at 600 million net is 500 million so that's also something to calculate in depreciation as always there is investments but as you own land the free cash flow is pretty positive this is such a diversification plan where you have to see how that fits your portfolio if you look at the stock price since the listing we can see it going up and down up and down up and down so it is a very volatile stock perhaps you might buy it now that it is at 10 year lows almost with the same thing happening in 2013-2004-15 and the end of 2015 so take advantage of that if you look for exposure to land what I have to do is compare this one with other investments in land that are there that are possible and then see which one is the best so I give you an idea here do what you can do with it or just keep following the channel for more land related investments over time I'm not in a rush to check those investments we'll see this is mostly sugar commodity investment I don't think it is bad now I don't yet I didn't yet calculate the returns but that's something that I have to make a model about this is just the preliminary research to generate idea thank you for watching I'll see you in the next video