Paul Price

Monsanto: Temporary Weakness Presents Option Opportunity

Sowing the Seeds of Recovery

By KOPIN TAN - Barrons Nov. 28, 2009

Monsanto's having a dry spell, but it's sowing the seeds of future growth.

PLANTING SEEDS IS AN ACT OF FAITH, an investment in a future you can't yet see. That's something Monsanto shareholders need to keep in mind.

The agricultural giant is weathering an uncharacteristic dry spell: The 2009 stock-market rally that has lifted everything seems to have shortchanged agriculture, and falling grain prices limit farmers' willingness to pay up for crop seeds. At the same time, Monsanto's profits from selling herbicides have plummeted, while spending is increasing as the company prepares to launch two crucial new batches of genetically modified corn and soybeans.

T. Rowe Price New America Growth Fund (PRWAX), a major Monsanto shareholder. "The world is not blessed with an unlimited supply of water and arable land, and so farmers need better seed technology to improve crop yield." And unlike fertilizer, the market for genetically tweaked seeds still is largely underpenetrated outside the U.S.

China, for instance, has 22% of the world's population but just 7% of its arable land and 8% of its water. China already has to feed 12.5 people per hectare of arable land, compared with just 1.7 in the U.S., and it is rapidly losing farmland to industrialization.

Morgan Stanley's Andrews figures Monsanto's seed business will grow at an 18% pace in the next three years, with new products, increased pricing and a growing market share.

The Bottom Line

Monsanto shares are worth a bite. Although the company faces several near-term obstacles, especially in herbicides, its long-term prospects are very bright.

One big concern is that Monsanto has failed to gain U.S. market share in corn and soy while rival DuPont's (DD) Pioneer seed business did. But field trials show Monsanto's top three hybrids producing a higher yield of 10.6 bushels per acre compared with Pioneer's. That edge could help Monsanto in the future. Monsanto is expected to earn $4.40 a share in 2011 after a disappointing $3.29 in 2010. That's a future worth investing in.

DeVry: 'Learning' to Make Money

Aggressive Growth DeVry Inc. By: Bill Wilton of ZACKS
November 25, 2009

DeVry Inc. (DV - Analyst Report) continues to top estimates and the Zacks Consensus Estimate is on the rise.
Company Description

DeVry is the parent company for several schools and other educational services including DeVry University, Apollo College, Becker Professional Education, and others.

Net Income Up 57%

The company released first-quarter results for fiscal 2010 on Oct 27 that included revenues of $431 million, a 42% jump. Net income also surged and was 57% higher to $54.7 million.

Earnings per share came in at 76 cents, 11 cents higher than the Zacks Consensus Estimate. This was the third consecutive earnings surprise.

Excellent Growth

President and CEO, Daniel Hamburger, commented on the great quarter. "Our financial results this quarter were driven largely by exceptional revenue growth," said Daniel Hamburger. He added, "Our institutions continue to experience strong enrollment and student retention..."

Rising Estimates

Full-year estimates are up for 2010 and 2011. Currently the Zacks Consensus Estimate for this year is $3.19, up from $3.01 over the past 2 months. Next year's projections are averaging $3.86, up from $3.63.

These levels represent year-over-year growth of 38% and 21%, respectively.

Valuation

Shares are trading at just 17 times forward earnings, not a bad value for such a hot sector. Also, the company's PEG ratio is 0.9 times, so the growth is reasonably priced.

The Chart

The Zacks Consensus Estimate has been climbing consistently for the past 5 years and shows no signs of slowing.

Bill Wilton is the Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Growth Trader service

Deere & Company: Cyclically Low Earnings Make for a Good Entry Point

Deere (DE): FQ4 EPS of $0.23 beats by $0.20. Revenue of $4.73B (-29.8%) vs. $4.44B. Sees sales down just 1% in F2010.

DE closed at $52.22 yesterday - up 19.3% since my August 20th write-up.

Why Barron's Is Wrong About For-Profit Education Stocks

ITT Education [ESI] is a great company trading at a bargain price.

Today's investors should do very well from the present quote going forward.

Avnet Available at a Bargain Price

Value: Avnet, Inc. NYSE:$28.58 /share

By: Tracey Ryniec of ZACKS

November 24, 2009

Avnet, Inc. (AVT - Analyst Report) recently saw quarter over quarter growth as the global recession eased. The company is trading with a forward P/E of 13.2.

Company Description

Avnet distributes electronic components and computer products to customers in 70 countries worldwide. It also provides services such as supply-chain and design-chain services, logistics solutions, product assembly, device programming, computer system configuration and integration and technical seminars to allow its customers to operate efficiently.

Avnet Surprised By 29.41% in the Fiscal First Quarter

On Oct 29, Avnet reported better than expected fiscal first quarter 2010 results. It beat the Zacks Consensus Estimate by 10 cents. Earnings per share were 44 cents compared to the consensus of 34 cents. This was under the year ago period, however, which saw 67 cents.

Revenue fell 3.1% to $4.36 billion compared to the year ago period. The Electronics Marketing segment was the weaker segment with revenue falling 9.8% to $2.44 billion from the fiscal first quarter of 2009.

The Technology Solutions segment saw improvement as revenues rose 6.9% compared to last year.

Like every business, the company is still being impacted by the global recession but it saw growth rates rise sequentially which is improving confidence.

Second Quarter Guidance

Sales are expected to be between $4.1 billion and $4.7 billion in the second quarter with normal seasonality in the Technologies Segment and slightly better than normal in the Electronics Marketing segment.

Earnings per share are expected in the range of 52 cents to 60 cents per share assuming the average Euro to U.S. Dollar currency rate is $1.48 to 1.00 euro.

Zacks Consensus Estimates Rise

In the last month, analysts have raised both the second quarter and fiscal 2010 estimates. The second quarter Zacks Consensus Estimate jumped 6 cents to 56 cents.

The 2010 Zacks Consensus rose 13.7% to $2.08 from $1.83 with 10 out of the 11 covering analysts raising during the last 30 days.

Value Fundamentals

Avnet is a Zacks #1 Rank (strong buy) stock. It is trading with a price-to-book of 1.43. The company has a solid 5-year return on equity (ROE) of 10.82%.

Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor in charge of the market-beating Zacks Value Trader service.

Tata Motors: License to Dive

Perhaps the three previous commentors need to read income statements and balance sheets instead of just painting in broad brush comments about India.

TTM is losing big money with no signs of a near-term improvement.
Debt is excessive.

At $3 it was a good speculation. At $14 it's a good short.

Tutor Perini: Constructing an Option Play

On Jacobs Engineering [JEC] I'm now writing Jan 2012 $40 and $50 puts at great prices and with lots of time for earnings to get back to more normal levels.

AllianceBernstein: Still Worth Buying

November 12, 2009 (FinancialWire) (Investrend Research Syndicate) --ValuEngine, Inc. has upgraded AllianceBernstein Holding Lp (NYSE: AB) to a "5" rating, the service's highest.

The ValuEngine Rating is an overall assessment of a stock's attractiveness. It combines the following five factors: ValuEngine's proprietary valuation, risk-return tradeoff, momentum, market capitalization and ValuEngine's proprietary forecasted one-month return. Approximately 80 to 85 companies achieve this highest ValuEngine rating out of VE's total coverage of over 5,000 publicly traded companies.

ValuEngine is a subscription-based business intelligence, market and equity analysis firm that provides exclusive, customized research and analysis solutions directly to companies, investors, investment banks and broker-dealers.

Tutor Perini: Constructing an Option Play

It was reproted today that value investor David Dreman started a substantial new position in TPC (with an estimated average cost of $18.36/share) during the third quarter.

Sealed Air Still Packing Great Returns

Zacks makes Sealed Air their "Bull of the Day" stock...








Bull of the Day


Sealed Air Corp. (SEE)


By: Zacks Equity Research
November 17, 2009

Sealed Air Corporation ([url=javascript:void(... - Analyst Report) reported third quarter 2009 EPS of 38 cents, above the Zacks Consensus Estimate of 33 cents and the prior-year EPS of 28 cents. The company raised its full-year 2009 EPS guidance to a range between $1.37-$1.45.

The company expects to continue to realize benefits from its cost reduction and productivity programs in the fourth quarter. Also, the company is witnessing improved market conditions in developing nations. Sealed Air posted double-digit sales increases in some of these markets.

Based on the improved outlook, as well as the company's efforts to revitalize its bottom-line, we are upgrading the rating on the stock to Outperform.

Sealed Air Corp.: Packing Potential Gains

Zacks makes Sealed Air their "Bull of the Day" stock...








Bull of the Day


Sealed Air Corp. (SEE)


By: Zacks Equity Research
November 17, 2009

Sealed Air Corporation ([url=javascript:void(... - Analyst Report) reported third quarter 2009 EPS of 38 cents, above the Zacks Consensus Estimate of 33 cents and the prior-year EPS of 28 cents. The company raised its full-year 2009 EPS guidance to a range between $1.37-$1.45.

The company expects to continue to realize benefits from its cost reduction and productivity programs in the fourth quarter. Also, the company is witnessing improved market conditions in developing nations. Sealed Air posted double-digit sales increases in some of these markets.

Based on the improved outlook, as well as the company's efforts to revitalize its bottom-line, we are upgrading the rating on the stock to Outperform.

Knight Capital Group: Buying on the Dip

Barrons reported 2 insider buys of NITE totaling 35,000 shares (Nov. 16 issue).

Investment Technology Group: POSIT-tively Cheap

My previous buy/write [published here and on beatingbuffett.com last April] worked out quite nicely with a cash-on-cash return of 53% for a six-month holding period that ended Oct. 16th.

Investment Technology Group – POSIT-tively Cheap

My April ITG recommendation played out very nicely...

On the October 16th expiration date ITG closed at $27.15 /share.

The best-case scenario was achieved as the calls were exercised and the puts expired.

This resulted in the 53% cash-on-cash return (for the six-month period- not annualized) as was described in the write-up.


I'm still in the trade from July and added more to it recently as described in the latest write-up from Nov. 13th.

Investment Technology Group Is Investment Worthy

On the October 16th expiration dtae ITG closed at $27.15 /share.

The best-case scenario was achieved as the calls were exercised and the puts expired.

This resulted in the 53% cash-on-cash return (for the six-month period- not annualized) as was described in the write-up.