Bunge Ltd. likes the entire food chain

Readers of this space know that the investment bias is toward large-cap companies with demonstrated business models and a competitive advantage in established markets, preferably with a favorable global trend as a support. And with the above in mind, Bunge Ltd. is worth a review.

Bunge Ltd. (NYSE: BG) is the world's No. 1 soybean processor, a leading South American fertilizer maker and provider, and a major U.S. food processor. BG is also the world's largest oilseed producer. Analysts see BG's sales advancing 13-17% in 2008, after a double-digit gain in 2007.

Further, analysts believe Bunge is well-positioned in the world's largest food production regions to take advantage of the world's fastest-growing consumption markets. In addition, analysts like BG's 80-nation footprint.

Margins may narrow slightly in 2008, due to higher commodity and energy costs. The Reuters F2008/F2009 EPS consensus estimates for BG are $6.63/$7.61.

The risks? Analysts are keeping an eye on soybean margins. A global economic slowdown would also (obviously) hurt BG's results.

The First Call mean rating for BG is: Hold [9 firms]. Mean 2008 target: $132 [high: $143, low: $120].

Stock Analysis: Bunge Ltd. is a moderate-risk stock not suitable for low-risk investors. Investors with an investment horizon longer than 2 years should be rewarded from BG's shares. Sell / Stop Loss if you were to purchase shares in this company: $72.

Disclosure: Lazzaro has no positions in stocks. In addition to private real estate holdings, he owns corporate and municipal bonds, and cash certificates of deposit.