‘We want to buy agricultural companies’: Mario Gabelli

DBA – the Invesco DB Agriculture Fund is currently down nearly 10% from its year-to-date high but billionaire investor Mario Gabelli is convinced the agri stocks are a good investment for the next several years.

Why Gabelli likes agriculture stocks

Historically, the agricultural stocks tend to do relatively well in a recession that looks likely as the Fed continues to lift interest rates. This morning on CNBC’s “Squawk Box”, Gabelli said:

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We want to buy agricultural companies. This year, $535 billion of cash up from $400 odd billion goes into the farmers because they’re working their fannies off from fence to fence.

Food prices were up 10.9% on a year-over-year basis in July as reported here. So, the agri space does play a significant role in the ongoing fight against inflation as well.

Two agri stocks to buy right now

In the mega caps, Gabelli is bullish on Deere & Company (NYSE: DE) that’s up 7.0% for the year.

Another one he likes is the British-American multinational CNH Industrial NV (BIT: CNHI) that’s broadly known for its New Holland brand. The famed investor noted:

We particularly like at the moment is New Holland. There’s 1.3 million shares, the stock is around $12. We think they can earn a buck and a half to $2.0 within twelve months.

In July, CNH reported its results for the fiscal second quarter that handily topped Wall Street estimates. The stock is down 15% versus the start of 2022.