Share tips Play the global food supply crunch – MoneyWeek

Thegroupbuys,sells,stores,transportsandprocessesoilseeds,grains,sugarcane,biofuelsandwheat。

Italsoproducesfertilisersandanimalfeed。

ItsoperationsspanestablishedpowerhousesliketheUSandrapidlyexpandingpartsofeasternEuropeandAsia。

Thisglobalofferingisenhancedbyfirst-classstorage,millingandtransportfacilities。

BungemanageseightsugarcanemillsinBrazil。

Theseareequippedtoproducerenewableelectricityfromethanolthatcanbedivertedtothenationalgrid。

Overtime,powergenerationcouldgenerate20%ofthedivision’sprofits,providingbothasourceofgrowthandgreaterdiversification。

Bunge(NYSE:BG),ratedaBUYbyFeltlandCompany

WallStreetexpects2012turnoverandunderlyingearningspershare(EPS)of$62。

7bnand$6。

54respectively,risingto$66。

4bnand$7。

29in12monthstime。

Thatputsthestockonamiserlyprice/earnings(p/e)ratiooflessthanten。

Iratethestockonaninetimesearningsbeforeinterest,tax,depreciationandamortisation(EBITDA)multiple。

Adjustingfor$690mofpreferencesharesand$4bnofnetdebtgeneratesanintrinsicworthofaround$75pershare。

Risksincludevolatileprices,increasingcompetition,geopoliticalfears,foreigncurrencyfluctuationsandpossibletradeprotectionism。

Nonetheless,thelong-termfundamentalsareverypositive。

Thecompanyalsooffersasoundhedgeagainstinflationintheeventthatquantitativeeasingspiralsoutofcontrol。

Feltlhasatargetpriceof$82,andthenextquarterlyearningsaredueoutonWednesday25July。

Rating:BUYat$61。

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