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The Money Man Behind Rick Santorum: Who Is Foster S. Friess?This post is part of a special report, Top Picks for 2010, the 27th annual survey in which TheStockAdvisors.com asks the nation's leading advisors for their single favorite stock for the new year. See all 80 stocks listed here.
"Monsanto (MON) is my top investment idea for 2010," says Sy Harding, an advisor well-known for his seasonal timing strategies.
In his Street Smart Report, he observes, "Monsanto is the world's leading provider of biotech-advanced seeds and agricultural products for growers; seeds for corn, soybeans, cotton, fruit, and vegetables, which are produced by its genomics division."
Harding continues, "Monsanto experiences high grower demand for such seeds, which are genetically engineered to provide increased crop yields, increased quality, insect and disease resistance, and drought tolerance.
"The company recently introduced two new products, SmartStax for corn, and Round-up Ready-2-Yield soybeans, which are potential drivers for significant growth going forward.
"The company said it expects to plant 8 to 10 million acres of Roundup Ready-2-Yield soybeans in 2010, along with a more than 4 million acre launch of SmartStax seed corn, both significantly higher than earlier projections for the new products.
"The company has also introduced two versions of a lower cost genetic corn seed, VT Double Pro and VT Triple Pro.
"The goal of those products is to let growers test the advantages of farming with genetically engineered seeds without having to move all the way to the higher-priced SmartStax seeds.
"The lower price products were introduced in anticipation that the growers will be so impressed with their extra yield, quality, and profits that they will move up to SmartStax the following year.
"The company invests roughly 10% of revenues back into research and development of new products, and has also demonstrated an ability to make meaningful acquisitions, which in recent years have included DeKalb, Asgrow, and DeltaPine, which add to its technology and product base, while at the same time eliminating some competitors.
"The company has received import approval for its Roundup Ready-to-Yield soybeans in China, which potentially will result in demand from growers in South America, who export large quantities of soybeans to China.
"The risks include that consumers are not completely sold on genetically altered foods, and growers will only grow from biotech-advanced seeds that percentage of their crops that they know they can sell. And of course Monsanto's sales are influenced seasonally by weather and commodity grain prices.
"We believe higher prices lie ahead for MON. Our upside target is $100 a share. We suggest a trailing 'mental' protective stop at $69.40."
Steven Halpern's TheStockAdvisors.com offers a free daily overview of the favorite stocks of the nation's leading financial newsletter advisors.
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