This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Planting Optimism in Monsanto

NEW YORK ( TheStreet) -- I know full well that saying anything remotely positive about Monsanto (MON - Get Report) will likely get me in trouble. But, frankly, I can't resist.

I get that there are ongoing controversies surrounding this company -- from Monsanto's genetically enhanced seeds to what many believe are the company's unfair pricing tactics, which has soured the company's relationship with farmers. But things are getting better.

Contrary to what several readers believe, I've never discounted that these matters were real. In fact, I've been a huge advocate and a facilitator of these sorts of discussions. However, unlike most, I also understand there are always two sides to every story.

In these accounts, I don't believe that Monsanto has received a fair trial in the court of public opinion. The company's recent third-quarter earnings report serves as perfect evidence.

The headlines all read that Monsanto's fiscal third-quarter profits dropped 3% -- the company missed revenue estimates, etc -- I get it. But what I also get is that Monsanto is honoring its word and commitment to restoring the soured relationships with farmers.

Case in point: Because of the severe drought in 2012 that adversely impacted the soil in several parts of the United States, which hurt the company's seed business, Monsanto was forced to utilize South American greenhouses to produce corn seeds. The impact of this decision was felt this quarter to the extent of a 7% increase in the cost of goods sold.
[Read: <a target="blank" data-add-tracking="true" href="http://www.thestreet.com/story/11971574/1/microsofts-cloud-partners-paying-off.html"><em>Microsoft's Cloud Partners Paying Off</em></a>]

Instead of passing on this extra 7% cost to farmers, which would have been a standard business maneuver, Monsanto opted to absorb the higher expenses tied to seed production. Monsanto understands that if it needs to repair relationships with farmers and customers around the globe, this was a worthwhile investment.

Disappointingly, however, nobody has pointed out this fact. I don't expect this gesture will be accepted by activists as the sort of "olive branch" that it is. Sadly, even those who report on this will spin it into a "public relations stunt." But ask the farmers whose costs weren't increased how that so-called "PR stunt" is itemized on their bottom line.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
MON $107.86 -0.45%
AAPL $125.85 -0.47%
FB $87.99 0.81%
GOOG $523.11 -0.06%
TSLA $280.49 0.17%

Markets

DOW 17,684.95 -45.16 -0.25%
S&P 500 2,069.91 -6.87 -0.33%
NASDAQ 4,991.8880 -17.3260 -0.35%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs