CRESUD Sum Of Parts Analysis (Video)

  • Cresud represents an investment in agricultural land and real estate.
  • It is a great company, but whether it is undervalued is up for discussion.
  • Investors could reach better returns by buying the subsidiaries in Israel and Argentina.

Cresud (NYSE: CRESY) is a Latin American holding company. It owns agricultural land in Argentina and Brazil, real estate in Argentina, New York and a diversified business including real estate, communications and supermarkets in Israel. The agricultural land in Brazil is owned through a stake in Brasilagro (NYSE: LND). The Argentinian Real estate focused on retail and offices is owned through IRSA (NYSE: IRS) and IRSA Commercial properties (NYSE: IRCP) and the Israeli assets are owned through is owned through a Dutch holding company that owns IDB.

In addition to that, IRS owns 29.9% of Banco Hipotecario, 49% of the Lipstick building in New York and a very interesting land bank on a riverfront location in Buenos Aires.

It has taken me a few day to figure CRESY out, so this 17 minute video will save you a lot of time.


Argentina Has Great Businesses – ADR stock list

  • Great investment returns come from buying things nobody wants to touch with a ten foot pole.
  • Argentina might be such a case.
  • The MSCI Argentina ETF is definitely not the way to get exposure to the Argentinian bargains.

A look at the Argentinian stocks traded on the NYSE shows how there are good businesses there.

Figure 1 Argentinian stocks traded on American exchanges

argentina stocks

Source: Author’s data

Most companies are directly related to the Argentinian economy which has recently been re-categorized as an emerging market. That is the first sign of a possible rebirth. However, Argentina still has lot’s of issues like political risk, currency problems and economic stagnation. But, to reach great investment returns it is better to buy when there is blood on the streets. I think that there is still plenty of blood on the streets to offer positive asymmetric risk reward investing opportunities.

Nevertheless, investing in Argentina is not an easy straightforward process. A look at the holdings of the iShares MSCI Argentina ETF (AGT) shows how Mercadolibre (MELI) makes 24% of the index while Tenaris (TS) 17%. The two companies, the first a LATAM growth promise story and the second a global steel pipe maker, are certainly not the way to Invest in Argentina. An investor can get much better exposure by carefully selecting specific stocks with lower valuations, better book values and revenues actually coming from Argentina.

Enjoy the video where we give a quick overview on 10 stocks that might give you some research and investing ideas.