With many agribusiness stocks continuing to soar, below we highlight the current and expected valuations of the companies that make up the Market Vectors Agribusiness ETF (NYSEARCA:MOO).
Most of the stocks that are up the most this year are the ones with the highest trailing P/E ratios. Potash (NYSE:POT) is up 63% and has a P/E ratio of 54.22. Mosaic (NYSE:MOS) is up 67% and has a P/E of 52. And Monsanto (NYSE:MON) is up 28% with a P/E of 47.
Not all stocks that make up the ETF have high valuations, however. CF Industries (NYSE:CF) is up 52% year to date but has a relatively low P/E of 20. While down 15% this year, Deere (NYSE:DE) has a P/E of 16.78.
But stock prices really move based on forward expectations, and since earnings expectations for these companies in the future are high, their estimated P/E ratios for next year are much lower. POT and MOS both have very high trailing P/Es, but their estimated P/Es are 13.6 and 12.8 respectively. The one that might be the most overvalued based on estimated P/Es is Monsanto (MON) at 33.87.
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