Feb. 11, 2014, 2:24 PM
- The EU appears set to approve Europe's second genetically modified crop for cultivation in 15 years, handing a victory to DuPont (DD +1.4%) over objections from most of the EU's member states.
- At a meeting of EU ministers today, 19 out of the bloc's 28 nations opposed approving the 1507 corn developed by DuPont, but that wasn't a big enough majority to prevent the European Commission from approving the corn.
- DuPont first sought approval for the crop 12 years ago but is now on the verge of success after multiple scientific safety reviews and several decisions by the European Court of Justice criticizing the Commission for delaying a decision.
- Only one other genetically modified crop is allowed to be grown in the EU, a corn developed by Monsanto (MON) that is resistant to corn borer; it was approved by the bloc in 1998.
Feb. 6, 2014, 11:56 AM
- The market seems to view DuPont (DD +1.3%) as a stodgy chemical company, but it is one of the world's biggest sellers of seeds, pesticides, fertilizers and other crop protection products; a Barron's profile says shares could climb 20% as investors start to give DuPont credit for those businesses.
- DuPont delivered better than expected Q4 earnings last week, helped by fast-growing sales in its agriculture division; the unit contributed ~40% of 2013 operating profit and is DD's fastest-growing business, with sales that could rise at a double-digit rate during the next few years.
- Compared with companies focused on agriculture chemical products, DD has been trading at a discount, at 14.2x estimated 2014 earnings; investors pay 19x-20x estimated earnings for Monsanto (MON) and Potash (POT).
Jan. 31, 2014, 1:01 PM| Comment!
Jan. 29, 2014, 2:49 PM
- Today's strength in Gevo (GEVO +9.7%) is attributed to a Bloomberg story that butanol may be in U.S. pumps as soon as next year in a challenge to ethanol’s domination of the $26B renewable fuels market.
- Butamax Advanced Biofuel, funded by DuPont (DD) and BP, is retrofitting an ethanol plant in Minnesota to begin making butanol in commercial volumes in 2015, and Gevo, backed by Total (TOT) and billionaire Richard Branson, already runs a distillery in the state; both groups say they’ve lined up clients for large-scale deliveries.
- “With ethanol dominant as a gasoline additive, the U.S. fuel industry simply hasn’t had much reason for adoption of butanol, [but] that may be starting to change now that ethanol is hitting a blend wall," says Raymond James analyst Pavel Molchanov.
Jan. 28, 2014, 7:09 AM
- Du Pont (DD) net profit doubles to $185M, lifted by strong insecticide sales in Latin America and earlier seed shipments in North America.
- Segment operating earnings +52% to $939M.
- Agriculture operating earnings $88M vs seasonal operating loss of $77M a year earlier. Electronics & Communications +116%, Safety & Protection +57% and Nutrition & Health +40%.
- Announces $5B share-repurchase program, with $2B expected to occur in 2014.
- Expects 2014 operating EPS of $4.20-4.45 vs consensus of $4.31. (PR)
Jan. 28, 2014, 6:03 AM| Comment!
Jan. 28, 2014, 12:05 AM
Jan. 27, 2014, 5:30 PM
Jan. 9, 2014, 2:56 PM
- DuPont (DD +0.9%) is upgraded to Buy from Neutral with a $70 price target at BofA/Merrill.
- The firm believes DD stands to benefit from a confluence of favorable circumstances: (1) projected acceleration of global growth; (2) ongoing portfolio improvement via the pending separation of Performance Chemicals; (3) growing financial flexibility that should support future dividend increases; and (4) inexpensive valuation relative to history and industry peers.
- Separately, Executive VP Mark Vergnano is appointed CEO of the titanium dioxide business when it is spun off next year.
Jan. 8, 2014, 10:34 AM
- "The Safety Bubble Deflates," goes the title of a new report from Bernstein's Seth Masters, adding his name to those voices suggesting "safe" assets have become otherwise.
- Even though utilities, telecom, and consumer staples have underperformed of late, says Masters, their relative valuations are still well above the average over the last 50 years. "In periods of stress, investors tend to prize stability and safety too much. But in time, investors discover that every investment carries with it some degree of risk: if not risk of loss, then risk of inadequate growth."
- Related ETFs: XLU, IDU, VPU, NLR, GRID, JXI, NUCL, DBU, IPU, RYU, PUI, UPW, FXU, SDP, PSCU, AXUT, FUTY, UTLT, XLP, VDC, FXG, RHS, FSTA, PSL, PSCC, IYZ, VOX, IXP, IST, XTL, LTL, FCOM, TLL, AXTE
- Barron's Jack Hough says the "low beta" approach is a flawed one: First, volatility can change quickly as companies' or industries' fortunes shift; Second, beta tells one nothing about whether a stock's valuation is high or low. In a similar warning over low volatility stocks, BAML suggests looking for companies with smooth earnings rather than smooth stock prices. Screening for such, Hough finds CSX Corp (CSX -0.6%), DuPont (DD +0.6%), Cisco (CSCO -0.6%), and Halliburton (HAL -0.8%).
- Low volatility ETFs: SPLV, USMV, ACWV
Dec. 28, 2013, 8:30 AM
- A tripling of the market over the last five years has made it a difficult environment for value investors looking for ideas, writes Tsachy Mishal; difficult, but not impossible. Mishal has recently put money to work in four new investments:
- Air Products & Chemicals (APD) has a lot more in common with Bill Ackman's successful moves than it does with boners like J.C. Penney and Herbalife, says Mishal. The appointment of a CEO in Q1 should be a catalyst, he says, as the new chief lays out his strategy and Ackman makes public his detailed investment thesis.
- Trading at a steep 20% discount to book value, Annaly Capital (NLY) is the victim of year-end tax-loss selling and the fear of the effect of higher rates on book value, says Mishal. But the year is nearly over, and Annaly management has lowered leverage, hedged its book, and diversified into CMBS - it's well-positioned against further rate increases.
- Eastman Chemical (EMN) has spent the past few quarters paying down debt from an acquisition, says Mishal, but starting in Q1 should begin using its ample cash flow to aggressively buy back stock. Management has an EPS goal of $7 in 2014 and $8 in 2015, and is on the record as saying acquisition targets are too expensive. That leaves share repurchases. Against his long in Eastman, Mishal is short ALB, CE, DD, DOW, and FMC.
- Municipal bond closed-end funds are getting it from both sides - fears of higher rates and credit worries. Throw tax-loss selling into the mix and many are now trading at near-10% discounts to NAV and yielding almost 7% - the taxable equivalent of over 10%. "Municipal bonds offer the best after-tax, risk-adjusted return of any asset class." He's long: NRK, VMO, VKQ, PMO, NAN.
Dec. 17, 2013, 2:08 AM
- Superior Court Judge James Kleinberg has tentatively ordered Sherwin-Williams (SHW), NL Industries (NL) and ConAgra Grocery Products (CAG) to pay $1.1B to replace or contain lead paint in millions of homes in California.
- However, Kleinberg dismissed the claims against two other defendants, BP (BP) unit Atlantic Richfield and DuPont (DD).
- The case was brought by 10 city and county governments in California, which argued that the lead is harmful to children. The substance has been banned in residential paint since 1978.
Nov. 21, 2013, 8:35 AM
- DuPont (DD) agrees to sell its Glass Laminating Solutions/Vinyls business to Kuraray for $543M plus the value of the inventories.
- GLS/Vinyls is a leading supplier of polyvinyl butyral and ionomer sheets for safety glass, and vinyl acetate monomer and polyvinyl alcohol products used in a variety of architectural, automotive and industrial applications; the business delivered 2012 net sales of more than $500M.
- DuPont has been working to move away from lower growth commodity businesses toward higher growth areas, including nutritional products and agriculture.
Nov. 8, 2013, 7:59 AM
- DuPont's (DD) agricultural seed unit of DuPont is teaming with Deere (DE) in a race against rival Monsanto (MON) to provide farmers with enhanced "precision agriculture" analyses aimed at maximizing crop production.
- The programs, which will roll out next year, will give farmers guidance on field management decisions including planting, crop treatment, pest control and even the best time to harvest.
- DuPont Pioneer has long counseled farmers on the best seed to plant for their particular farms, but the deal with Deere is the latest in a series of moves by both DD and rival MON to turn farm-related data analyses into new profit streams by incorporating analytics on an array of data points.
Oct. 25, 2013, 12:19 PM
- DuPont (DD +0.2%) is upgraded to Buy from Neutral with a $70 price target, up from $61, at Citigroup after news of the planned separation of the company's performance chemicals unit.
- The move could unlock value at DD by creating two companies more focused on heir core competencies and more nimble in decision making, the firm believes, and prompt investors to focus on other parts of DD's portfolio, lead to greater transparency at the segment level, and likely drive more accountability at both companies.
Oct. 24, 2013, 5:30 PM| Comment!
DD vs. ETF Alternatives
E I du Pont de Nemours & Company is a science and engineering company that offers products and patents applications for agriculture, nutrition, electronics and communications, safety and protection, home and construction, transportation and apparel.
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