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.
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 per cent.
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 per cent. The dividend growth over the last five years screams “buy me” at 20.4 per cent per year, especially when coupled with expected earnings that support a payout rate under 40 per cent.
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 tumours 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.
Background: Mosaic is one of the world’s leading producers and marketers of concentrated phosphate and potash crop nutrients. For the global agriculture industry, Mosaic is a single source for phosphates, potash, nitrogen fertilizers and feed ingredients. Mosaic is a subsidiary of Cargill . Mosaic trades an average of 4.2 million shares per day with a market cap of $24-billion.
- 52-Week Range: $44.43 to $62.65
- Price To Book: 2.04
Mosaic is forecast to record a slightly lower first-quarter earnings result before the market opens on Tuesday. The consensus estimate is currently $1.15 a share, a drop of 2 cents (1.7 per cent) from $1.17 during the equivalent quarter last year.
The last time Mosaic released earnings was July 17, and the closing price was $58.21. Based on a recent price of $57.68, Mosaic shares are lower by 1 per cent since.
Fourteen out of 19 analysts rate Mosaic a buy or strong buy. The company has five analyst hold recommendations, and not one sell rating can be found. The average analyst target price is $66.56.
The widely followed 60-day moving average is trending the 200-day moving average, very bullish while the shares trade above both. Shares recently tested the 60-day average Shareholders are now receiving $1 annually in dividends, for a yield of 1.74 per cent. In the last three years, the dividends have steadily increased.
The short interest based on the float is small and not a big concern. Short interest is 2.4 per cent, relatively on par for companies in this space.
Background: OCZ Technology is engaged in the design, manufacturing, and distribution of Solid State Drives (SSDs) and computer components. SSD is a disruptive, game-changing technology that is a substitute to traditional rotating magnetic hard disk drives (HDDs). SSDs are faster, generate less heat and use significantly less power than the HDDs.
In addition to its SSD and Memory Module product lines, the company designs, develops, manufactures and distributes other high performance components for computing devices and systems, including thermal management solutions, AC/DC switching PSUs and computer gaming solutions. The company was founded in 2002 and is headquartered in San Jose, Calif. OCZ Technology trades an average of 5.1 million shares per day with a market cap of $230-million.
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