HEARD ON THE STREET: New Seeds May Sow Stock Gains for Syngenta [Wall Street Journal]
Summary: Upstart agri-chemical company Syngenta is riding the ethanol tide and looking to take on industry giant Monsanto. Analysts are excited about this Swiss company that specializes in crop production improvement through genetically modified seed development and chemical crop protection businesses. Syngenta is the product of the 2000 Novartis/ AstraZeneca merger. Though ethanol prices have fallen this year due to rising supplies, the gasoline price dip and Brazilian imports of sugar cane-based product, Syngenta is counting on new product launches for 2008, when ethanol prices are still uncertain. Syngenta shares are up 38% for the year; they closed at $34.05, down 1.1% on Friday. The company expects to increase margins for its seeds business to 15% by 2010, from 8.2% in 2005. Syngenta had earnings growth of 27% last year and plans to enlarge its market share in crop protection by .5% a year.
Related links: Read more Long Ideas.
Potentially impacted stocks and ETFs: Syngenta (SYT), Monsanto (MON) • Competitor: BASF (BF), E.I. DuPont de Nemours (DD)
Seeking Alpha is not affiliated with Wall Street Journal.