ALCO - Alico: Thesis Playing Out; Maintain Buy
2024-05-21 07:31:04 ET
Summary
- Alico's citrus groves were negatively impacted by Hurricane Ian in 2023, but improvements are expected in the current harvest.
- ALCO recently sold off the Alico Ranch, allowing the company to delever.
- The Company's current portfolio of citrus groves underpin $44/share in real estate value.
- Alico's current renegotiation of the Tropicana supply contract and potential re-development of its citrus groves could further increase its value.
With Alico ( ALCO ) recently reporting fiscal second-quarter results, I thought it would be timely to take another look at the company, as it has been several months since I last wrote about Alico. Since my last article, we are well on our way into the 2023/2024 citrus-grove harvest, which should start to see improvements from the Hurricane Ian-induced weakness. Furthermore, the company recently sold off the Alico ranch lands in December, leaving the business as a pure-play bet on orange groves. Is Alico still significantly undervalued after the latest results?...
Alico: Thesis Playing Out; Maintain Buy