The biotech sector is an area where big fortunes can be made (or lost) very quickly. As the markets appear to stabilizing, new profit possibilities are emerging in biotechnology. And the fact is, they don't have to be risky.
Monsanto (MON) is a well-known agriculture and chemical company. It's the largest seller of seeds in the world, but it also has a strong and growing presence in the biotech sector. Here's why it's one of the best biotech bets you can find.
The company's sales of seeds have been improving after losing some ground in 2014 and the first half of 2015. Management expects seed sales to pick up even more, which should add $3.5 billion of gross profit growth from fiscal year 2016 to fiscal year 2019. Seed sales from its Latin America operations are expected to drive much of this growth.
Agriculture has been in a downturn in recent months, but Monsanto is already laying the groundwork for the inevitable rebound. For example, it's investing significant resources to develop drought-resistant crops and other seeds with traits needed to grow food crops in challenging, food-poor regions of the world.
Monsanto has been a pioneer in biotech advances for decades, as part of its effort to protect plants against harmful insects and weeds that hurt productivity. It adds biotechnology traits to crops to help them survive traditional challenges. The company also has a wide variety of pest and weed control options that have the potential to produce a durable and productive crop.
Monsanto has seen success with a new type of soybean that is specifically designed using biotechnology for the climate conditions prevailing in key markets in the Southern Hemisphere, including Brazil and Argentina. Other products in Monsanto's pipeline include insecticides and disease control, where the company is gaining ground on rivals such as DuPont and Dow Chemical.