Often investors think that they have to invest in an exciting tech stock for mega returns.
But that isn't always the case. In fact, sometimes even boring ASX All Ords shares can deliver the goods for investors.
For example, Bell Potter believes that Australian beef company Australian Agricultural Company Ltd (ASX: AAC) could generate huge returns for investors.
It owns and operates Australia's largest cattle herd with around 433,000 head spread over its properties across Queensland and the Northern Territory.
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Why buy this ASX All Ords share?
Bell Potter believes that the company's shares are thoroughly undervalued at the current level.
Particularly given that since reporting its latest results, its analysts "have witnessed a sharp upward movement in cattle market indicators."
This bodes well for the company and has led to the broker increasing its earnings estimates for the near term. It said:
Operating EBITDA upgrades of +1% in FY24e, +24% in FY25e and +2% in FY26e.
In response to this, the broker has retained its buy rating and lifted its price target on the ASX All Ords share to $2.00 (from $1.90 perviously).
Based on its latest share price, this implies potential upside of approximately 42% for investors over the next 12 months.
The broker highlights that Australian Agricultural Company's shares are trading at a deep discount to net asset value (NAV). It explains:
Our Buy rating is unchanged. Cattle prices have rebounded strongly and US meat pricing indicators remain fairly firm. AAC has not benefited from the same recovery in its share price to date and continues to trade at a material 40% discount to 1H24 NAV, despite a 50% rally in the heavy steer indicator and an 87% rally in the EYCI post balance date.
