(Corrects story originally published Sept. 28 to say that Zynga is releasing earnings sometime in October.)
NEW YORK (
TheStreet) -- Key players are reporting earnings next week. These companies demand your attention due to the illumination provided for key industry spaces. They will provide first looks into worldwide expectations for food and feed crops next year, computer storage and social gaming.
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Background: Monsanto is a leading global provider of technology-based solutions and agricultural products for growers and downstream customers such as grain processors and consumers, in the agricultural markets. The combination of its herbicides, seeds and related genetic trait products provides growers with integrated solutions to more efficiently and cost effectively produce crops at higher yields, while controlling weeds, insects and diseases. Monsanto trades an average of 3.1 million shares per day with a market cap of $48.69 billion.
52-Week Range: $58.89 to $91.95
Book Value: $22.95
Price To Book: 3.89
Monsanto is forecast to report weaker fourth-quarter earnings before the market opens on Wednesday. The consensus estimate is currently expected at a loss of 44 cents a share, doubling the loss of 22 cents during the same period last year.
Last quarter Monsanto's earnings were released on June 27, and the previous closing price was $80.89. Shares are now trading up about 13%.
Analysts are not alarmed by the expected loss and the direction Monsanto is headed. Eleven of the 18 analysts covering Monsanto continue their buy recommendation, six analysts rate it a hold and only one has a sell rating. The average analyst target price is $97.46.
Monsanto is in a strong bull trend. The key moving averages are progressing higher, and shareholders are elated. Trend followers love this pattern and will hold a position until a technical break.
The company currently pays $1.20 per share in dividends for a yield of 1.33%. The dividend growth over the last five years screams "buy me" at 20.4% per year, especially when coupled with expected earnings that support a payout rate under 40%
Monsanto has potential revenue risk with NK603, a genetically engineered corn recently subject to a sales halt in Russia, France, and possibly parts of Africa. A controversial French study suggests rats may have developed tumors as a result of eating the product. The single product is not as important as what impact it may have on the perception of future genetically engineered products.
Overall, I believe Monsanto is a buy on dips. Profits should continue to grow as demand grows world wide.