When natural disasters happen, there are always some companies that can turn the circumstances in their favor. Recent downpours in the Midwest provided such an opportunity as they came not only with high damages for people in the area, but also with floods for crop production, causing even higher agricultural commodity prices. The rise in corn and soybeans prices could easily lead to an increased demand for seeds, agricultural equipment, and fertilizers. BusinessWeek suggests some big names to invest in that could offer us the advantages we are looking for. One such company is Archer Daniels Midland (NYSE: ADM), which could also benefit from higher ethanol prices, after purchasing seven businesses in 2007. Bunge Limited (NYSE: BG) is also amid possible winners, having forecast better-than-expected fertilizer earnings. Shell eggs producer Cal-Maine Foods (NASDAQ: CALM) is also on the selected list; the company saw its shares climb 15% year to date, and has just revealed a new dividend payout policy.
Another important name is Mosaic Co. (NYSE: MOS), whose stock prices have surged 70% so far this year. BusinessWeek cites Mosaic as being able to benefit from higher prices for fertilizer and potash. Following the same logic, the article points out potash provider Potash Corp. of Saskatchewan (NYSE: POT) and fertilizer distributor CF Industries Holdings (NYSE: CF), which should be able to take advantage of the weak dollar and higher sales prices.
Another stock to consider is Monsanto (NYSE: MON), which should benefit from higher planted corn acreage and strong seed prices. At the same time, farm-equipment makers such as John Deere (NYSE: DE) are expected to see an increase demand for their products as farmers will need more and more tractors to boost their activity.
However, those are only a few big names that BusinessWeek recommends to us. To get a clearer and more comprehensive image of these potential companies and their chances, just take a look at the BusinessWeek slide show.
Eliza Popescu is a financial writer for the online investment advisory service Investor's Observer.
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Reader Comments (Page 1 of 1)
6-20-2008 @ 4:25PM
speculator said...
The US is in a recession and the we are also in a bear market. I am short the market as a whole. The only stock which are going to make money are the one related to commodities.
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