Monsanto (MON) could be the next big thing. They are a food producer. A major global food producer that gets revenue from farmers who use their seeds. A lot of the vegetables and fruits in your market originated from a agricultural lab of Monsanto. They are one of the largest global players in the agriculture market.
How do they make money?
They sell seeds to farmers. When farmers make money, Monsanto makes a percentage of that cash. The funny thing is their crops spread to whoever is next to it. This gives their the ability to put lawsuits on other farms. They claim the other farms are using their patented seeds without paying for it. This is probably kind of unethical, but they do make lots of money doing this.
Why do people buy their seeds?
They have genetically modified their seeds to give the most abundant, freshest, and sweetest product. Their seeds are made to protect against bugs and weeds.
They also have many agricultural products. Many of them are used for crop protection. “Once a year farmers make a decision about which seed to plant. At Monsanto, we work everyday for that opportunity to serve farmers.” – Hugh Grant CEO. ` They also sell pesticides. Their most popular is ‘Roundup’. You might have seen their commercials back in the day.
Here’s a video on Monsanto:
Let’s do some technical work on this company.
The stock has reached it’s low point. It’s bound to move up from here. If you read the latest SEC filings, you’ll find that many of the big management has been buying their stock recently. There were hugh purchases made on March 2, 2010, January 20, 2010, and November 2009 by insiders. Their purchases were in the range of $71-$76. They have been buying since early 2008. March 9, 2010, the John Hancock Trust fund bought $259,815,600 worth of stock. Many of these institutional funds buy on the cheap and sell when it gets high.
I’d like to put my money with the big institutional buyers and insiders. If the stock breaks $70, I’d be willing to sell and get rid of it, but the stock charts show that this should easily go pass $80 giving you more than a 10% gain. This is a great short-term play. For those playing long-term, they have EPS growth for the past 10 years. The last two years have a huge jump on the EPS and they always make a profit every quarter. This is another boring stock company that does not have much news, but whenever you eat, you should know that Monsanto has a little bit to making that food.
That’s my stock tip for today. Enjoy! Happy Trading!