In the real-money portfolio I run for The Motley Fool, named Messed-Up Expectations, I look for companies where the market is not expecting great things and has thus mispriced the shares. When the company actually manages to deliver results beyond Mr. Market's expectations, he wakes up, hits himself on the head (figuratively speaking), and prices the shares to a more appropriate -- and higher -- level.

So far, I've been reasonably successful, with 16 of the 18 positions that have been open more than a short while in the green (the portfolio just opened a position in Barnes & Noble) and the portfolio as a whole has outperformed the market for each of the last two years (with this year nearly doubling the market's pace).

For the latest addition to the Messed-Up Expectations portfolio, Lindsay (LNN -0.08%), I believe the market is overly focused on the short term and is missing the international growth opportunity the company is moving into.

Bringing water to where it's needed
Lindsay sells irrigation systems to farmers. Boring, right? But if you dip below the surface, you'll see that there's a huge growth opportunity that the company's working to exploit.

Besides rain, there are three basic ways to water crops: gravity or flood irrigation (flowing water over the ground to the crops), drip irrigation (piping water along the ground directly to the plants and dripping water to them), and mechanized irrigation (spraying water onto the crops).

For large areas of cropland, drip irrigation is expensive, requiring a complex system of tubes and spouts that need to be maintained. Gravity irrigation has the drawback that it doesn't evenly irrigate across lumpy fields, plus it is labor intensive. However, it's cheap to set up and therefore used 90% of the time internationally.

Mechanized irrigation, on the other hand, uses less water than gravity (1/3-1/2 less), results in higher crop yields than gravity irrigation, and can irrigate a large area of land for less cost than drip irrigation. These advantages have helped mechanized irrigation in the U.S. grow from 35% penetration to 46% penetration over the past decade. Over the same period, gravity irrigation has dropped from 50% to 39%. Drip irrigation has a mere 7% share today, and Deere & Company recently announced its intention to exit the market.

The opportunity
Two things are behind the opportunity. First is the need for more food. According to the Food and Agriculture Organization, by 2050, the world's population is expected to grow by 2 billion, with a corresponding need of 40% increase in cereal crops. Second is the need for more efficient water use. According to the United Nations, worldwide fresh water extraction outpaces fresh water consumption by a significant (and growing) margin. The biggest user of water is Asia, where most of the world's irrigated land is located.

Lindsay has been steadily increasing its sales outside the U.S. over the past several quarters and last quarter, international sales surpassed domestic sales for the first time ever at the company.

Globally, Lindsay sits No. 2 behind Valmont Industries (VMI -1.97%), but it has been growing its irrigation business faster than Valmont has, gaining market share over the past decade. Plus, it is more innovative than Valmont. It pioneered use of GPS and field monitoring (e.g. soil moisture) to its systems. Recently, it partnered with Syngenta to integrate feedback systems like these even more into the irrigation systems it sells.

The messed-up expectation
Analysts have lowered expected earnings for the next couple of years. This apparently reflects concern that the record corn harvest this year led to a decline in the futures price of corn, which in turn would lead to less money available to farmers for capital investments next year, thus hurting Lindsay.

The company has seen downturns like this before -- in 2008, for instance -- and survived. Over the past decade, it's managed to generate annual revenue growth averaging over 15% a year despite several drops in corn prices. And with international growth going strong, that would mitigate any short-term pain in domestic revenue, assuming farmers do indeed pull back on buying irrigation systems. Yet the recent droughts are leading to a change in sentiment, succinctly put by one Indiana farmer: "We don't want Mother Nature to control our destiny anymore."

I expect any downturn in U.S. revenue to be less than expected, for the company to recover faster than expected, and for continued strong international growth. Thus, the company will outperform expectations and be a good long-term investment for the Messed-Up Expectations portfolio. I'll be buying shares as soon as Fool trading rules allow.

Come discuss this new addition to the Messed-Up Expectations portfolio on my discussion board. I'd love to hear from you.