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Historically, tumultuous times offer some of the best opportunities to buy stocks, and the market's recent mess surely qualifies. And though shares of agriculture technology company Monsanto (NYSE: MON ) have yet to fully recover to their pre-recession highs, many investors expect better times.
In our Motley Fool CAPS community, about 96% of the 3,065 investors rating the company are bullish, so there's no shortage of reasons why Monsanto will thrive, three of which I've highlighted below.
But here at The Motley Fool, we're all for looking at both the good and the bad sides of an investment. Once you're done with this article, you can read the case against the stock, weigh in with your own comments below or rate Monsanto yourself in CAPS.
1. Worldwide agriculture boom
CAPS members like the potential for global growth in agriculture and the way many companies are fighting tooth and nail to get a larger piece of the pie. CF Industries (NYSE: CF ) eventually won its takeover battle for Terra Industries, while BHP Billiton (NYSE: BHP ) is chasing after PotashCorp (NYSE: POT ) . And Agrium (NYSE: AGU ) is working on its own scale-up plan by buying Australian wheat exporter AWB to expand in Australia and Asia. With the growing population, many investors are excited about Monsanto's chances to capture a substantial piece of the market.
2. Seed dominance
Because Monsanto is the world's largest seed company, many CAPS members are bullish on it being able to hold a competitive edge, despite aggressive competition from the likes of DuPont (NYSE: DD ) and others. With Monsanto's arsenal of seeds like SmartStax, which it developed with Dow Chemical (NYSE: DOW ) ; VT Triple PRO Corn, which recently brought better yields than the competition; and Roundup Ready 2 Yield, investors like the company's track record of continuously improving products.
3. Earnings potential
Despite the generic competition hitting Monsanto's herbicide business, many investors expect the company to profit nicely in the years ahead. The company offers strong seed sales trends in international markets and is restructuring its Roundup business. It's aiming for annual earnings growth in the mid-teens in the coming years.