Over the top
Aug 1, 2008 12:00 PM, By Mark Moore
Arobust agricultural economy has been good for the companies that supply seed, fertilizer and equipment. As a result, stock prices of several agricultural-related companies have seen significant increases, even as talk of a general economic slowdown has put pressure on the Dow Jones Industrial Average.
Consider this: If you had bought $1,000 in Monsanto stock on January 4, 2006, you could have sold it for $3,534.41 on June 18, 2008. A $1,000 investment in Mosaic stock on January 4, 2006, was worth $10,393.80 on June 18, and $1,000 of stock in Deere and Company grew to $2,292.85. By comparison, $1,000 of Exxon Mobile stock purchased on January 4, 2006, was worth $1,507.04 on June 18.
“In general, the investment community is looking favorably to the agricultural sector,” says Sam Halpert, senior analyst with Van Eck Global. “The earnings momentum from the ag sector is working well.”
Lynn Henderson, publisher of AgriMarketing magazine, has tracked agricultural sector stocks, and in a portfolio he keeps of 28 company stocks in the agriculture sector — seed, fertilizer, animal health and chemical — the portfolio's return since its inception on January 1, 2006, has been an impressive 113%. “And if you take out the underperforming animal health stocks, the performance would have been even greater,” he says.
Here's a look at the recent earnings of several ag companies:
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In a report of Monsanto's third quarter results, the company's Chairman, President and CEO Hugh Grant said, “Backed by continued growing demand for our products, the first nine months of our fiscal year has been remarkable and we're now increasing our full-year guidance. This strong growth sets up a solid foundation for our business and to reach our target of more than doubling gross profit in 2012.”
Seed, fertilizer on top
Monsanto reported record net sales of $3.6 billion for the third quarter of fiscal year 2008, which were 26% higher than sales in the same period in fiscal year 2007. Net sales in the company's first nine months of fiscal year 2008 resulted in year-to-date sales of $9.5 billion, which were 35% higher than sales in the same period last year.Monsanto's net income for the third quarter of fiscal year 2008 was $811 million, or 42% higher than net income in the same period last year. For the first nine months of fiscal year 2008, net income was 83% higher than net income in the same period last year.
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