NEW YORK (TheStreet) -- Shares of Monsanto (MON) are gaining 1.87% to $102.98 in Wednesday morning trading as the U.S. seed producer enters discussions with Bayer's (BAYRY) management and others about "alternative strategic options" a month after rejecting the German company's $62 billion takeover offer.
Monsanto also reported third-quarter earnings that fell short of analysts' estimates before the market open.
Shares should be down between 4% and 5% if they were trading based on earnings alone, so "there's something here," TheStreet's Jim Cramer said of the talks on CNBC's "Squawk on the Street" this morning.
As for other potential buyers, Cramer ruled out DuPont (DD) while observing that a bidder would need to be a company not currently involved with seeds. He mentioned BASF (BASFY) as a possibility.
The agricultural cycle has been "terrible," but no one cares, Cramer said. There has been seed consolidation, and a lot of agricultural equipment companies have been doing "quite well."
"We are supposed to have a major European crisis and here you've got Bayer possibly in a bidding war for a U.S. seed company," Cramer stated. "Does that tell you that life goes on?"
Separately, TheStreet Ratings team rates the stock as a "buy" with a ratings score of B.
Monsanto's strengths such as its expanding profit margins and notable return on equity. We feel its strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.
You can view the full analysis from the report here: MON
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.