NEW YORK ( TheStreet) -- Shares of Monsanto (MON) are up 12% year-to-date and are trading just off a new 52-week high. However, regardless of what the stock price may say, this is not an extraordinarily well-liked company.
Despite the strong rebound in the stock and consistent operational improvements by management, bears are still looking for ways to discredit the company while dismissing all of the recent market advantages management has created. Although I don't own the stock, I've found myself coming to the company's defense quite a bit. But it's time for some perspective.
Let's Have Some Perspective
One of the most popular cited bear arguments suggests that Monsanto has been alienating farmers and will continue to do so at an alarming rate. Bears fear that the company will eventually lose market share to rivals like DuPont (DD) and Syngenta (SYT). However, Monsanto's recent earnings performances tell a different story.
The company is coming off an excellent first-quarter, during which revenue shot up almost 21%. While the Street was already modeling for a strong performance, Monsanto still managed to beat estimates by more than 10%. Nevertheless, bears still found ways to point out the negatives.While it's true that soybeans, which declined 5%, along with sub-par performances in cotton and vegetables, are legitimate concerns, the company was able to offset this with dominant performances in seeds and traits, which posted 14% year-over-year growth. When coupled with strong results from corn, which arrived higher by 27%, it seems management deserves the benefit of the doubt that it will shore up the company's weaknesses. Besides, it's not as if profitability was adversely impacted. Monsanto was able to advance first-quarter gross margin by almost 3%, which resulted in a 15% improvement in gross profit. Here too, is another sign of strong management, which continues to figure out ways to make the best out of difficult macro environments. What's more, not only did operating income arrive better than expected, but it more than doubled year-over-year.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV