Editor’s Note: Controlled Environment Agriculture (CEA) may not be the topic of lively chatter at investment expos, but it’s a disruptor ready to shake up agriculture over the next decade. Envision crops growing in sleek urban skyscrapers, not sprawling countryside fields, powered by high-tech wizardry such as vertical infrastructure, hydroponics, and aeroponics. It’s agriculture meets sci-fi.

Despite CEA’s massive potential, the financial media has somehow missed the plot, leaving this unsung industry ripe for proactive investors. Below, I pinpoint my favorite CEA stock. Here’s the kicker: the stock currently trades at a bargain.

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The Global Food Crisis

Climate change, population growth, and diminishing arable land are intensifying the need for efficient and sustainable food production methods. CEA addresses these issues head-on, using 90% less water and requiring less land.

Many governments are starting to subsidize CEA initiatives to bolster food security and reduce reliance on imports.

Advances in LED lighting, artificial intelligence (AI)-driven crop management systems, and automated harvesting are making CEA more cost-effective and scalable.

Rising energy costs and geopolitical instability in traditional agricultural markets will highlight the value of localized, self-sustaining food production systems.

Because CEA is still an emerging sector, it’s often given short shrift by institutional investors. This lack of attention means valuations are still reasonable, offering early movers the potential for outsized returns. The industry also has a long runway for growth, making it an ideal value play.

The Hidden Gem

Many of the companies in the CEA industry are microcaps with shaky finances. As a general rule, I avoid penny stocks unless I find one that’s especially promising.

A compelling publicly traded stock in this industry with strong financial wherewithal is Corteva (NYSE: CTVA).

Corteva (market cap: $37.9 billion) is a global leader in CEA solutions. The company’s cutting-edge innovations in seeds, crop protection, and digital agriculture make it a key enabler of modern farming technologies, including urban vertical farming.

And yet, while self-promoting CEOs like Elon Musk hog the media spotlight, you never hear about stocks like Corteva. That’s good news for bargain-hunting contrarians like me.

Corteva develops technologies that support sustainable farming, including specialized seeds and crop inputs designed for controlled environments like vertical farms. Its leadership in this space allows it to supply the critical inputs needed for efficient and productive urban farming operations.

Corteva’s research and development (R&D) focus on creating high-yield, climate-resilient seeds makes it a vital partner to the growing vertical farming industry. The company’s digital tools, such as farm management software, align with the data-driven approaches of CEA companies.

Urbanization and sustainability concerns are driving growth in CEA. Corteva’s market-leading position ensures it benefits not only from traditional farming demand but also from the surge in urban farming as cities invest in localized food production.

Corteva has the financial strength to invest heavily in R&D, enabling it to stay ahead of smaller competitors in vertical farming technologies.

Based in Indianapolis, Indiana, Corteva operates in over 140 countries, giving it a broad distribution network and the ability to support CEA projects worldwide.

Corteva has a diversified revenue stream, combining traditional agriculture and emerging technologies, which insulates it from sector-specific downturns.

The company maintains low debt levels and healthy cash flow, enabling it to reinvest in innovation and strategic partnerships.

Corteva spends nearly $1 billion annually on R&D, ensuring it stays ahead of competitors like Bayer (OTC: BAYRY) and privately held Syngenta in providing solutions for CEA, especially vertical farming.

The company collaborates with leaders in CEA to co-develop seeds and crop inputs tailored to indoor farming environments, giving it a competitive edge in this niche.

Buy on the Dip!

As the following chart shows, CTVA’s stock has enjoyed a good (albeit bumpy) run year to date, but the price has slumped in recent days:

The stock has come under pressure, following the company’s release on November 6 of lackluster third-quarter operating results. The quarterly underperformance was largely due to a drop in Latin American activity amid adverse weather conditions.

I view these headwinds as temporary. It’s time to buy on the dip. The stock’s Relative Strength Index (RSI) sits at about 32, near the oversold level.

The stock’s forward price-to-earnings ratio is 17.5, a bargain compared to its growth prospects. The average analyst expectation is that the company’s year-over-year earnings growth will reach 111.02% in the next quarter and 25.46% in 2025.

Corteva’s innovations, market leadership, and strong financial position make it an essential player in the CEA ecosystem. For investors seeking exposure to the growth of urban and vertical farming without the volatility of smaller startups, Corteva offers outsized growth combined with compelling value.

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John Persinos is the editorial director of Investing Daily.

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