The Costa Group Holdings Ltd (ASX: CGC) share price rose 4.5% today as it recovered some of the last ground from last week.

Costa is Australia’s largest horticultural business. It produces glasshouse tomatoes, berries, avocados, mushrooms and citrus fruit. It has over 4,500 planted hectares of farmland, 30 hectares of glasshouse facilities and seven mushroom growing facilities across Australia. Costa also has international interests, with majority-owned joint ventures covering six blueberry farms in Morocco and three berry farms in China.

Why Costa is up 4.5% today

Investors were looking at Costa with a fresh perspective today after plummeting around 40% last week due to reducing its profit guidance for the 2019 result.

However, bargain hunters have been sniffing around the horticultural company to see if the fall in profit made the company that’s investing for growth on three different continents good value.

If Costa were to produce the exact same profit figures in FY19 as FY18 it’s currently valued at around 13.5 times statutory earnings.

Investment manager Jun Bei Liu from Tribeca thinks this could be an opportunity to buy Costa shares, she said to the AFR: “These are the times when you can actually build your position within this company, because the growth profile in this company is not one year, it’s much longer than that”. 

Costa is still aiming for long term double digit growth of underlying net profit (NPAT-S) and CEO Harry Debney remains focused on investing for growth. Costa said that “ongoing growth plans across the categories continue to track well.”

An oversupply of produce, particularly blueberries, has had a detrimental effect on the price that Costa has achieved for its food. It can’t escape the dynamics of supply and demand.

If international demand for fresh Australian food continues to increase then Costa may see a return to underlying profit growth. However, investors may wish to remain cautious until the earnings downgrade cycle stops.

Some investors seem to think that Costa is a buy today, but if you’re after international growth then the two ASX shares in the free report below may be better candidates to deliver it.

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Disclaimer: Any information contained in this article is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).