ASX agricultural shares could be facing a “huge opportunity” in coming years with some reportedly tipped to surge more than others.
Aitken Mount Capital Partners‘ Angus Aitken told clients “the last five years has been a real money-making opportunity” for ASX agriculture shares, as reported in The Australian.
But some stocks are tipped to do better than others. Here are three ASX agricultural shares the broker believes are “standout buys”.
Are these ASX agricultural shares set to take off?
Cobram Estate Olives Ltd (ASX: CBO)
Embattled ASX olive oil producer Cobram Estate has reportedly been flagged as a potential winning agriculture share.
The company floated in August 2021. Its share price has dipped nearly 5% since then to trade at $1.85 at the time of writing. But the broker reportedly believes it has the potential to go much higher.
“We think Cobram is a $5 to $6 stock over time,” Aitken told clients, as quoted by The Australian.
“Remember it takes five to eight years for an olive tree to mature and given 40% of their trees are yet to mature, you get 40% volume growth down here alone without spending another [cent].”
The broker also reportedly noted the company could break into the United States market.
Kiland Ltd (ASX: KIL)
Market watchers might be more familiar with Kiland by its former name, Kangaroo Island Plantation.
The company worked to harvest timber before bushfires damaged 95% of its tree crop in 2020. Fortunately, the ASX share still boasts thousands of hectares of agricultural land.
“Out of bad things, very good things happen and this business is now investing to clean up that land and turn (it) into premium farmland,” Aitken was quoted as telling clients.
“We think over four to five years this 18,000 hectares can be worth $300 million or more … We also see large carbon-related opportunities in this business over time that people won’t have looked at.”
The Kiland share price has fallen 9% since the start of 2022. It’s currently trading at $1.22.
Lark Distilling Co Ltd (ASX: LRK)
The final ASX agriculture share the broker thinks is worth looking at is Lark Distilling.
The company faced a major scandal this year when its CEO resigned amid apparent evidence of drug use.
“We are new to Lark as we think the valuation is dirt cheap,” Aitken wrote, courtesy of The Australian.
“[The former CEO’s] behaviour didn’t change the value of the brand or the maturing whisky.”
“Lark should easily make $25 million to $30 million (in earnings) down the track … you are buying this stock on single-digit multiples when the average [earnings before interest, tax, depreciation, and amortisation (EBITDA)] takeover in the premium spirits space is 30 to 40 times.”
Right now, shares in Lark are swapping hands for $3.08, 41% less than they were at the start of 2022.
The post 3 ASX agricultural shares with ‘real money-making opportunity’: broker appeared first on The Motley Fool Australia.
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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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