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3 Reasons to Buy Monsanto Today

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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.  

To see details of what CAPS members are saying now about Monsanto, just click on over to Motley Fool CAPS and have a look -- or add your own thoughts in the comments box below.

The Motley Fool Stock Advisor service looks for companies with strong management poised to beat the market over the long haul. To see all the stocks that have helped Tom and David Gardner beat the market by 67 points on average, take a free 30-day trial.

Fool contributor Dave Mock has three good reasons to explain his "apparent" lax attitude toward house chores lately. He doesn't own shares of companies mentioned here. Monsanto is an Inside Value selection. Motley Fool Options has recommended a synthetic long position on Monsanto.

True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. The Fool's disclosure policy is a superhero in its own right.

Read/Post Comments (2) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On September 17, 2010, at 4:37 PM, jaketen2001 wrote:

    Monshamto is just an evil company. Stay away.

  • Report this Comment On September 18, 2010, at 6:17 AM, funfundvierzig wrote:

    Investors must keep the larger picture in mind in evaluating Monsanto, the leader in innovation, and its nearest rival, the fallen behind Pioneer bureaucracy of the DuPont chemical conglomerate.

    The first major effort by DuPont Management to develop and commercialise a first generation genetically modified seed to compete with Monsanto has flopped. Parodically called DuPont OptimumGAP, Pioneer's belated offering can't be planted by farmers on a stand-alone basis without risk by the admission of Pioneer's own executives.

    While Monsanto is busy marketing its second generation GM seeds in corn and soya, Smartstax and Roundup Ready 2 Yield respectively, the ponderous Pioneer is stuck marketing primarily cut-rate discount conventional seeds.


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