With all the unshakable global worries over the financial crisis in Europe and the beleaguered euro, anything European may be the last thing investors would consider when looking for irresistible stock plays. But perhaps investors just have to look harder for undervalued opportunities with proven sturdy growth track records. Definitely, there are some to be found.

 

With a market capitalization of more than $26 billion and its stock shooting way up to record highs since 2006, Syngenta (SYT) is that kind of a company -– and it’s one of my favorite global stocks for various other reasons.

 

The stock has climbed every year since I first wrote about it for Business Week on Mar. 16, 2006, when it was trading at just $28 per ADR (American Depositary Receipt). It has since rocketed and more than doubled -- to a high of $71.03 on May 11, 2011 -- before the European mess, combined with the global plunge in global stock prices, pulled the stock back  to $55 on Dec. 15, 2011.

 

But the drop has made it all the more undervalued because Syngenta hasn’t stopped growing every year since, expanding its reach worldwide with a hefty 19% global share in the multi-billion dollar crop-protection market and 11% share in seed production.

 

The Basel, Switzerland-based company specializes in providing farmers with important and necessary products for crop protection and improving productivity with high performing seeds. Syngenta has outshined its big-name competitors DuPont (DD) and Monsanto (MON) in several ways.

 

With total sales climbing to $11.6 billion in 2010 from $10.9 billion in 2009, Syngenta remains the No. 1 in crop protection products and third in the agricultural seeds market. In February, the company integrated its  crop-protection and seed production operations to focus more on farmers’ needs and enhance its efficiency. Its array of crop-protection products, including herbicides, insecticides, and fungicides, are used in a wide variety of crops, as well as in fruits, vegetables, and even flowers. 

 

That has made Syngenta, which employs more than 26,000 people in over 90 countries, an even more effective one-stop shopping organization in the agricultural/chemica​l business.

 

"With the best and most diversified portfolio of technologies and geographies in the agriculture/chemical​ business, Syngenta is the only player that can fully benefit from the one-stop approach," says Patrick Lambert, analyst at France’s banking giant Societe Generale. If the strategy proves as successful as the company predicts, it will be even harder for peers to compete, he argues. 

 

By fully integrating crop protection and seeds sales forces and supply chains, Syngenta expects to achieve significant cost savings -- of about $625 million -- by 2015 and generate new business opportunities in many crops, including sugarcane, rice, wheat and barley.

 

Lambert says Syngenta is looking for further growth in its business in China and Africa, where the largest demand for crop-protection products and high-yielding seeds are likely to occur. He notes that Africa is importing some 50 million tons of grain, as is China. The imports are expected to grow significantly over the next decade on population growth and rising demand for meat in those countries and other emerging nations, says Lambert. 

 

"So the positive trends continue at Syngenta," says Lambert, who rates the stock a buy with a 12-month price target of $76 per ADR. The analyst sees Syngenta’s earnings rising to $19.63 per share in 2012 and jumping to $22.46 per share in 2012, way up from 2010’s $16.49 per share. For 2013, Lambert forecasts even higher earnings of $24.96 per share.

 

With the highest return in the agri-chem sector based on his proprietary forecasts, Lambert says Syngenta is "the most defensive way to play the agriculture/chemical​ cycle." The stock isn't yet well exposed to U.S. institutional investors in spite of its solid performance over the years, indicating that the stock still has more distance to go before reaching its peak levels.

 

As of Sept. 30, 2011, the top U.S. institutional holder in Syngenta is Delaware Management, with its stake of 1.1%, followed by Janus Capital Management, which owns 0.41%, and Scout Investments, with a modest holding of 0.29%.          

 

So when the global markets recover and other cash-laden and underinvested U.S. institutional investors "discover" Syngenta, the bulls are convinced the stock will race back up to its old highs -- or even higher.



Gene Marcial wrote the column “Inside Wall Street” for Business Week for 28 years and now writes for MSN Money’s Top Stocks. He also wrote the book "Seven Commandments of Stock Investing," published by FT Press.