For example, while the 13% growth is indeed impressive, Monsanto is coming off an excellent first quarter, during which revenue shot up almost 21%. The company then beat Street estimates by 10%. So, despite the strong second-quarter showing, Monsanto actually answered the question regarding momentum. Perhaps it is slowing. I also raised the concern regarding the company's performance in soybeans, which declined 5% in the first quarter. Unfortunately, there wasn't much improvement this time around as soybeans dropped again, this time by almost 2%. What's more, the declines in cotton seed and traits accelerated 9%. In other words, although management posted strong top-line results, there are still some weaknesses that need to be addressed.
Bottom LineThat said, there are still reasons to be bullish this company in the long term. The company's product pipeline is unmatched. Fundamentally, the company remains solid from the standpoint of revenue growth, financial position with reasonable debt levels and an impressive record of earnings per share growth with expanding profit margins.
At $105 per share, the stock's not cheap, given its P/E of 22. Even if fair value were to go higher to the $110 to $115 range, which is very realistic, it still doesn't present an exciting premium. But this is a well-managed company that can post some strong long-term gains with some operational improvements. Investors looking for exposure to agriculture should really consider this name. Finally, the company deserves a break. Monsanto is far from the "evil-doer" many investors are making it out to be. Ask yourself, since when has feeding the world become such a bad thing? At the time of publication, the author held no position in any of the stocks mentioned. Follow @saintssense This article was written by an independent contributor, separate from TheStreet's regular news coverage.