6 Investing Ideas for the Agriculture Industry Boom
As a private investor I enjoy exploring various investment ideas. At the moment hard commodities, tech and energy have been garnering the lion’s share of attention. A number of commentators have pointed out that, long term, the agricultural business looks like it can only go up. Jim Cramer on “Mad Money” has stated several times on his show that agricultural could be at the beginning of a twenty year bull market. Potash, Monsanto and Deere are commented on regularly on CNBC’s “Fast Money.” Here are some stocks and securities in the agriculture sector that I find interesting. All trade on the NYSE. Factual information is from www.schwab.com and was gathered after closing on 12/30/09 from each security’s chart.
Symbol: MON Price: 82.61 PE: 21 Div Yld: 1.29%
The main interest in Monsanto comes from their genetically altered seed business. Monsanto’s seeds enable foods to be grown in harsher environments and produce higher yields. As food demands increase
worldwide so should demand for Monsanto’s seeds.
Del Monte Foods
Symbol: DLM Price: 11.59 PE: 9 Div. Yld: 1.8%
Del Monte specializes in fruits and vegetables. Performance has been improving and several analysts have raised ratings on the stock the past few months. Many are still neutral. Continuing improvement should move more analysts into the buy column and increase the stock price.
Barclays Livestock Sub Index Fund
Symbol: COW Price: 27.99
This exchange trade fund tracks indexes of hog and beef futures. As other parts of the world become more affluent demand across the globe for these products should rise. Like most exchange traded funds it can be used as a trading vehicle, but also can be used as a long term sector investment.
Market Vectors Agribusiness Fund
Symbol: MOO Price: 44.04
More diversified than COW, Moo tracks the Dax Global Agribusiness Index. As a result it has holdings in a variety of subsectors. Potash, Deere, and Monsanto are amongst it’s top holdings. For the investor seeking to invest in a single security in the sector Moo looks like a viable candidate.
Deere & Co. (John Deere)
Symbol: DE Price: 54.77 PE: 27 Div. Yld: 2.04%
The leading producer of farm equipment, as world agriculture increases, so should sales of Deere’s equipment.
Symbol: POT Price: 109.07 PE: 13 Div. Yld: .37%
The leading producer of fertilizer. As world demand for agricultural products increases, so should demand for fertilizer. This would mean increased sales, prices and margins for Potash long term..
Symbol: DD Price: 34.05 PE: 46 Div. Yld: 4.80%
Technically a chemical company, Dupont is a stealth play on agriculture. About 25% of their business comes from genetically altered seeds, similar to Monsanto. If you like both chemicals and agriculture, Dupont deserves your consideration.
Full Disclosure: I am not employed in any fashion by any firm in the securities industry nor do I have a business relationship of any type with the companies mentioned. As of this writing I do not have any holdings in Deere & Co or Del Monte. I hold less than 2 shares of the other securities mentioned to keep on their mailing lists. This is not an offer to buy or sell any security, nor is it a recommendation. These are simply my thoughts on these securities. Please consult your own investment adviser and research any security thoroughly before making any investment.