Monsanto Company (MON) looks bullish

Monsanto Company (NYSE: MON) provides agricultural products to farmers worldwide. The company produces seeds and develops biotechnology traits that assist farmers in controlling insects and weeds. Products include canola, corn, soybean, fruit, cotton, sunflower and sorghum seed. Monsanto also manufactures the world's leading herbicide, Roundup. Further, it provides products that focus on improving dairy cow productivity and it sells genetics lines for improving the productivity and meat quality of swine.

Early last week, the firm issued upside guidance for FY07. Management boosted its EPS estimate from $1.75-$1.80 to $2.00. That topped the consensus Street estimate of $1.83. The news popped the shares out of an early September "cup" into the mid-September "handle" of a Cup & Handle formation. The price is now completing the pattern with a bullish rise from the right-hand side of the "handle," on word the company believes the opportunity for its biotech traits outside the United States could nearly triple the 95 million acres penetrated today.

Brokers recommend the shares with four "strong buys," four "buys," five "holds" and one "sell." Analysts see a 28% average annual growth rate, through the next five years. The MON Sales Growth rate (23.08%), EPS Growth rate (67.21%), Operating Margin (18.53%) and Net Profit Margin (12.92%) compare favorably with industry, sector and S&P 500 averages. Institutions hold about 86 percent of the outstanding shares. The stock is one of those used to calculate the S&P 500 Index. Over the past twelve months, it has traded between $42.75 and $83.97. A stop-loss of $72.50 looks good here. Note that the firm is expected to release fourth quarter results in the second week of October.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.