Buy Monsanto Company (MON): It Has Solid Long-Term Prospects

Page 2 of 2

Through these agreements, DuPont Pioneer will be able to offer Genuity Roundup Ready 2 Yield soybeans as early as 2014, and Genuity Roundup Ready 2 Xtend glyphosate and dicamba tolerant soybeans as early as 2015, pending regulatory approvals.

DuPont Pioneer will receive regulatory data rights for the soybean and corn traits previously licensed from Monsanto Company (NYSE:MON), enabling it to create a wide array of stacked trait combinations using traits or genetics from DuPont Fabros Technology, Inc. (NYSE:DFT) Pioneer or others. Monsanto will receive access to certain DuPont Pioneer disease resistance and corn defoliation patents.

Monsanto’s peers also optimistic about 2013

American Vanguard Corp. (NYSE:AVD), one of Monsanto’s chief competitors in herbicides, is optimistic about the year and feels that it is well placed to meet the increasing demand for soil insecticide. It intends to do this by maintaining full production of its products and proprietary equipment systems. The successful roll out of its herbicide co-marketing program with Monsanto is also expected to support its results.

American Vanguard witnessed a healthy rise in its fourth-quarter 2012 profit on the back of continued strong market demand for its products. For full year 2012, earnings climbed to $1.28 per share from $0.79 per share in 2011, topping the Zacks consensus estimate of $1.22.

Profits soared roughly 77% year-over-year to $11.3 million in the quarter, buoyed by healthy demand for American Vanguard’s crop protection products. American Vanguard Corp. (NYSE:AVD) is leveraging the growing demand for soil insecticides as the U.S. corn growers contend with pest problems. American Vanguard currently carries a Zacks’ “rank number three,” or hold rating.

Canada-based Agrium Inc. (USA) (NYSE:AGU), a leading global wholesale producer and marketer of all major agricultural nutrients and a premier supplier of specialty fertilizers, recently declared a quarterly dividend, which is scheduled for Thursday, April 18. The management seems confident about its financial performance this year.

Agrium recently reported Q4 adjusted EPS of $2.16, beating consensus estimates of $2 per share by 8%. Net earnings jumped to $354 million, or $2.34 per share, from $193 million, or $1.20 per share in 2011. Sales in the most recent quarter rose 3% to approximately $3.3 billion. According to Thomson Reuters, analysts on average expected Agrium Inc. (USA) (NYSE:AGU) to generate sales of $3.2 billion.

Canaccord Genuity trimmed its price target on Agrium from $127 to $123, according to a a research report sent to investors, Stock Ratings Network reports. Canaccord Genuity currently has a “buy” rating on the stock.


The long-term prospects for Monsanto Company (NYSE:MON) remain undoubtedly good. Monsanto ended its second quarter with approximately $4.8 billion in cash, equivalents, and short-term investments. The company operates with $2.2 billion in short-term and long-term debt, for a net cash position of approximately $2.5 billion. Monsanto currently pays a quarterly dividend of $0.38 per share, for an annual dividend yield of 1.4%.

Anindya Batabyal has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

Page 2 of 2