Is This Agriculture Company a Buy Following Trump’s Phase One Trade Deal?
U.S. agriculture exports to China decreased by 63% between 2017 and 2018, which had widespread impact on U.S. agriculture businesses. Chinese purchases of U.S. agriculture dropped from $15.8 billion to $5.9 billion, based on calculations from the International Trade Administration.One of the many businesses affected was Bunge Limited (NYSE: BG), an agribusiness and food ingredient company.
Poor performance in back-to-back quarters left Bunge vulnerable to takeover attempts by industry rival Archer Daniels Midland and commodities trader Glencore, both of which Bunge was able to fend off. As pressure to perform increased, Bunge struck a deal with activist investors Continental Grain and D.E. Shaw in 2018 to replace Soren Schroder as CEO with Greg Heckman, in addition to bringing on a new CFO, John Neppl, and four new board members. Heckman said the new Bunge was about "simplification, accountability, and speed," with the intention of generating efficiency and improving shareholder value.
This renewed leadership, in addition to easing tensions between the world's two largest economies, may deliver an upside for investors looking to invest in the food processing industry.
Source Fool.com
