Monsanto (NYSE:MON) is the type of stock that is extremely difficult to gauge, as many factors work against getting a solid grip on the fundamentals of the company. So when numbers and guidance are thrown around, most investors are left scratching their heads.
For example, two major factors are the media noise created from the strong opposition in some quarters to the company and its purpose. Secondly, the technology connected to the products of the agriculture giant isn't understood by most, and even when explained, leave most people in somewhat of a daze.
So when you have strong media opposition coupled with complicated technology, it leaves room for all types of assertions and interpretations which simply can't be confirmed or understood by those trying to look into the company.
Even with the opposition, that isn't the major reason behind the struggles of Monsanto. It is a part though, as the injunction against sugar beets recently revealed.
But overall, it's their patents running out and new products not performing to expectations which is driving down the stock price. That and higher prices in a recessionary period. Higher crop prices could help solve that dilemna.
So even though they're looked upon as an agricultural company, operationally they're very similar to a pharmaceutical company with patents running out and new drugs hopefully in the pipeline for them.
Still, Monsanto does have a strong competitive edge with some of their products, and that will remain in place, even though they've lost market share to DuPont (NYSE DD) with some seed.
The question is whether or not the bad news has been fully priced into the stock or not, and if it's time to buy again.
It did start to rebound at the beginning of October after plummeting in share price at the latter part of September.
We do have to leave off the political correctness and assertions from the celebrity "financial experts" and simply look at the company itself.
The key in the short term is the performance of their SmartStax corn seed. Early returns were disappointing, and the final returns from more northerly states haven't come in yet.
If they're closer to estimates, it could help push Monsanto back on the upward path again.
Other news is in some part of the world, including Brazil, some products are being cleared for use, and over the long term that will help the company.
Again, the hardest thing about Monsanto is the enormous amount of clutter and complexity associated with them. It takes a lot of work to sift through what's real and what's not to get even close to the truth.
Just the pure negative sentiment and being called by some possibly the worst stock of 2010, is a reason to take a second look at them to see if they're reaching bargain levels.
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