CGR Insights: Rising Prices Push Investment in AgTech (UAVS, ASTI, CTVA, GRWG, KROP)

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Capital Gains Report, a leading firm providing research for retail investors, is currently tracking agriculture and agtech companies benefiting from a recent spike in interest from institutional capital, and retail volatility related to the Russia-Ukraine war.

Agricultural Technology or Agtech has recorded a 60% increase in VC funding in 2021 over the previous year, to the tune of $5 Billion. Crunchbase reported $1 billion in Agtech investments through January 2022.  

Investors have started buying agricultural stocks to capitalize on rising food prices.  

CNBC’s Jim Cramer said, “I think the best approach to the bull market in agriculture is by betting on a basket of ag-related stocks, because when farmers make a lot of money, they pour it into seeds, equipment and fertilizer.”

Investors have been pouring capital into Corteva Inc (NYSE: CTVA).  The consensus price target for CTVA has increased 9.54% over the past month according to Benzinga.

  • CTVA is a global provider of seed and crop protection solutions focused on the agriculture industry. Its seed segment is engaged in developing and supplying germplasm and traits that produce optimum yields for farms. 
  • Its crop protection segment serves the global agricultural input industry with products that protect against weeds, insects, and other pests. Its brand includes CLOSER, DELEGATE, Pioneer, Brevant seeds, etc.
  • CTVA will release its earnings Wednesday, May 4th, post-market.

 

Ascent Solar Technologies, Inc. (OTCMKTS: ASTI) is a peripheral international agtech play. The company produces ultra-thin solar modules utilizing award-winning CIGS ‘Copper-Indium-Gallium-Selenide) technology.

  • Ascent Solar Technologies, Inc. (OTCMKTS: ASTI) aligned with Tube Solar AG, a leading German ‘agrivoltaic’ thin-film solar tube maker, signing a multi-million dollar long-term supply agreement in September 2021.
  • Tube Solar uses Ascent Solar’s ultra-lightweight CIGS technology to produce its patented tubular solar modules for agriculture.
  • This solves the ‘either-or’ open space conundrum, where open land could either be used for agriculture or a solar park.   
  • These tubes allow landowners to harvest both energy and crops on the same piece of land.  
  • It does so with nearly the same efficiency as conventional modules.
  • This may be a great time for investment in European renewable technology as the EU is currently assessing a 5% increase in its renewable energy target for 2030.  

AgEagle Aerial Systems Inc. (NYSE: UAVS) is another AgTech option.  The company is a leading provider of full-stack drone solutions for the agriculture industry. It has released its FY 2021 financial results.

  • UAVS’ revenues rose 659% to $9.76 million from $1.29 million.
  • The spike in revenue was primarily due to revenue contributions from companies acquired by AgEagle during 2021, which included MicaSense, Measure Global and senseFly.
  • Gross profit margin was 44% compared to 45%.

GrowGeneration (NASDAQ: GRWG) owns and operates 63 specialty retail hydroponic and organic gardening stores.  

  • GRWG’s revenues increased 46% to $90.6 million in the fourth quarter and increased 119% to $422.5 million for the full year of 2021.
  • Net income for the full year was $12.8 million, compared to the prior year’s net income of $5.3 million.
  • Net loss for the fourth quarter was $4.1 million, compared to a net income of $1.5 million in the prior year.
  • Adjusted EBITDA was a loss of $1.9 million for the fourth quarter, but increased 82% to $34.5 million for the full year 2021.
  • GRWG expects full-year 2022 revenues to top $400 million.

Less engaged investors may want to look at ETFs such as AgTech & Food Innovation (NASDAQ: KROP).  

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