4-Star Stocks Poised to Pop: Monsanto (MON)

4-Star Stocks Poised to Pop: Monsanto

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, seed giant Monsanto (NYSE: MON ) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Monsanto's business and see what CAPS investors are saying about the stock right now.

Monsanto facts

Headquarters (founded)	St. Louis (2000)
Market Cap	$33.8 billion
Industry	Agricultural chemicals
Trailing-12-Month Revenue	$11.5 billion
Management	Chairman/CEO Hugh Grant CFO Pierre Courduroux
Return on Equity (average, past 3 years)	14.8%
Cash/Debt	$1.22 billion / $2.24 billion
Dividend Yield	1.9%
Competitors	Dow Chemical (NYSE: DOW ) DuPont (NYSE: DD ) Syngenta (NYSE: SYT )

Source: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 96% of the 3,000 members who have rated Monsanto believe the stock will outperform the S&P 500 going forward. These bulls include KCSavage and daobkid.

Earlier this year, KCSavage succinctly summed up the bull case:

MON has farmers in a head lock and control of the world's dinner plate. Lots of patents. People hate them for the reasons I like this stock. Nice little dividend too.

Over the next five years, in fact, Monsanto is expected to grow its bottom line at a solid rate of 14.3% annually. That's faster than competitors such as Dow (6.3%), DuPont (10%), and Syngenta (7.5%).

CAPS member daobkid expands on the outperform argument:

The fact is, this company (whatever your feelings on their "tactics") is an innovator in its industry. It is the Apple of the agriculture world. The stock price doesn't show it, yet, but it soon will when the market sees how the other companies have fallen behind in a lot of areas. Biggest of which, is the re-investment this company continues to provide.

What do you think about Monsanto, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Interested in another easy way to track Monsanto? Add it to your watchlist.

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended creating a synthetic long position on Monsanto, buying shares of Syngenta and Apple, and creating a bull call spread position on Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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 icon found on every comment.

Report this Comment On October 05, 2011, at 10:31 AM, theleisureclass wrote:

Beware. Monsanto is in trouble. Their products are failing.
How? Here are two major ways:
1) Pests have developed resistance to the BT gene and corn crops are devastated in large parts of the country. This is an inevitable result of their products having a pesticide continually produced in every cell of the plant.
2) Superweeds resistant to RoundUp have developed and spread across the South and central US. Result? Farmers now must hand or mechanically weed. This is also an inevitable result of over-use of RoundUp due to RoundupReady seed.
The result is farmers are abandoning Monsanto's expensive products that don't work and returning to regular seed and production methods that have lower costs and are effective.
These are inherent risks to a questionable business model that many Monsanto stockholders aren't aware of.
Monsanto's products are failing NOW and new products take years to bring to market. That's why they raised their prices 10% - to smooth earnings in the next few years because farmers will not be buying their expensive failed seed.
This news has not broken big yet, but it is only a matter of time. Do some research - you'll end up in the ag-industry publications and university publications. This year's data is starting to be collected and analyzed for publication.
Monsanto is also the subject of a large anti-trust investigation for actions in the seed industry. Big things are happening in that arena also.
Fools, beware.
Report this Comment On October 05, 2011, at 10:56 AM, funfundvierseg wrote:

The operative words are "whatever you think about Monsanto" and their "tactics". These do make a difference to customers and investors. No matter how they spin their history and Solutia, Monsanto has earned and retains the title of the most "evil" corporation in the world. Sue U.S. farmers, shaft farmers in India, operate tasks that kill children in Illinois, cover up the truth about Agent Orange, critically harm residents of Anniston, Alabama, etc ad nauseum. If I retire rich as an accessory to these crimes, then I choose to be poor. WORD.
Report this Comment On October 05, 2011, at 2:46 PM, misterobvious wrote:

Sell Sell Sell! So I can buy cheap! You must be an economist if you think that one raises prices when your customers don't want what you're selling. Wow! I certainly think that Monsanto should turn the other cheek when folks steal their patented intellectual property. I sure would not defend my patent rights if I spent millions to develop a new technology. I'd just give it away.
Report this Comment On October 05, 2011, at 6:54 PM, theleisureclass wrote:

I'm not sure what you're saying, or if you're a real person.
The real investors on this site are savvy and do their own research on risks.
Report this Comment On October 05, 2011, at 10:34 PM, TXinvestor82 wrote:

It's very clear that Roundup is a dying product ever since being off-patent. In fact, all of Monsanto's pesticides (herbicides, fungicides, and insecticides) will suffer the same fate in a few years when the generics overtake them as well.
I think the real future of this company lies in the seed treatment side of the business. This is one group that is truly innovative.
Jury is still out about whether or not it will be successful..
Report this Comment On October 06, 2011, at 1:40 PM, misterobvious wrote:

Genetics is the future of crops.
Report this Comment On December 05, 2011, at 12:15 PM, theleisureclass wrote:

I told you so.
http://www.bloomberg.com/news/2011-12-01/monsanto-corn-may-b...

updated 2 days ago Sponsored by:
	DOW	12,454.83	-74.92	-0.60%
	S&P 500	1,317.82	-2.86	-0.22%
	NASD	2,837.53	-1.85	-0.07%

MON	$73.56		-0.38	-0.51%
Monsanto Company		CAPS Rating:

SYT	$63.85		-0.14	-0.22%
Syngenta		CAPS Rating:

DOW	$31.30		-0.25	-0.79%
The Dow Chemical C…		CAPS Rating:

DD	$48.40		-0.26	-0.53%
E.I. du Pont de Ne…		CAPS Rating:

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4-Star Stocks Poised to Pop: Monsanto

Comments from our Foolish Readers

Report this Comment On October 05, 2011, at 10:31 AM, theleisureclass wrote:

Report this Comment On October 05, 2011, at 10:56 AM, funfundvierseg wrote:

Report this Comment On October 05, 2011, at 2:46 PM, misterobvious wrote:

Report this Comment On October 05, 2011, at 6:54 PM, theleisureclass wrote:

Report this Comment On October 05, 2011, at 10:34 PM, TXinvestor82 wrote:

Report this Comment On October 06, 2011, at 1:40 PM, misterobvious wrote:

Report this Comment On December 05, 2011, at 12:15 PM, theleisureclass wrote:

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