A Big Upgrade for Cosan

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Every day, the sun rises on Wall Street, and a plethora of professional analysts wake to issue new opinions on stocks. Here at the Fool, we use our "This Just In" column to examine some of these picks -- and the track records of the companies behind them -- so individuals can make better investing decisions.

In addition to following professional banks, anyone can use Motley Fool CAPS to monitor the collective opinions of the 140,000 members, many of whom demonstrate better investing insight than published analysts do.

After spending most of the past year at a three- and four-star rank in CAPS, enough top-performing CAPS members have turned bullish on Cosan (NYSE: CZZ) recently to upgrade it to a more formidable five stars. A total of 247 members have given their opinion on the sugar and ethanol producer, with many of them offering analysis and commentary explaining the recent optimism.

Similar to the spike in corn prices last summer, weather conditions in Brazil and India, the world's two largest sugar-producing countries, has helped push sugar prices to highs not seen in decades. The squeeze has boosted shares of Brazil-based Cosan and other sugar producers such as Imperial Sugar (Nasdaq: IPSU). High-fructose corn syrup producers like Archer-Daniels-Midland (NYSE: ADM) are benefiting as well as people seek alternative sweeteners. The shortage is even severe enough to have some U.S. food producers like General Mills (NYSE: GIS), Kraft (NYSE: KFT), and ConAgra Foods (NYSE: CAG) urging the government to increase quotas for tariff-free imported sugar.

Higher sugar and ethanol sales volumes and gains on derivatives helped Cosan book record profits in its recent quarter. It's also benefiting from new operations from a fuel distribution business it picked up from ExxonMobil (NYSE: XOM) last year. The company says it has reduced its sugar hedging to take advantage of rising prices and will increase hedging if it senses prices are nearing a peak. It's also directing a greater percentage of its crush to sugar production, above the industry average, leaving the remainder going to ethanol.

Do you think Cosan deserves its five-star status? Add your thoughts in the comments box below, or head over to CAPS to rate it yourself. While you're at it, see what the very best CAPS analysts are saying now about the company.