Shares of Monsanto Company (MON) rose yesterday after the agriculture giant announced better-than-expected earnings for the first quarter.
Monsanto has been in “hold” territory for quite some time. Will MON stock’s latest report be enough to turn things around?
Monsanto – Company Overview
Monsanto is the multi-billion agricultural biotechnology company that is commonly known as subject of several high-profile documentaries.
Monsanto pioneered the use of genetically modified crops in the 1980s and has since grown into a global empire that employs more than 22,000 people worldwide and brings in over $15 billion in sales each year.
Current MON products include pesticides and seeds for everything from cotton to soybeans to corn.
Monsanto – Earnings Rundown
Despite reporting stronger-than-expected sales and earnings, Monsanto’s revenues and profit were still down in the first quarter.
MON earned $243 million, or 50 cents per share, on $2.87 billion in net sales. Compared to the same quarter last year, this represents a 9% drop in net sales and a 25% dip in earnings. Excluding special items, adjusted earnings were 47 cents per share.
Analysts had called for earnings of 35 cents per share on $2.8 billion in sales. So, Monsanto posted a 34% earnings surprise and a 2.5% sales growth. Looking ahead to fiscal year 2015, Monsanto backed its outlook for earnings; Monsanto forecasts $5.75 to $6 EPS. Analysts expect earnings to be $5.89 per share for the year, which is in line with the Street view.
Monsanto – Current Ratings
Before you buy any stock, you should always run it through my free Portfolio Grader. For the past several months in a row, Monsanto has been lagging in terms of institutional buying pressure (as shown by its C-rated Quantitative Grade).
Meanwhile, Monsanto’s financial metrics also need some work. Of the eight fundamental metrics I graded Monsanto on, it receives C-ratings on four, including operating margin growth, earnings growth, earnings momentum and earnings surprises. Analyst earnings revisions is an area where MON could use the most improvement, earning a D-rating.
At the same time, MON receives solid marks on sales growth (B), cash flow (B) and return on equity (A). So, MON earns a B on its overall Fundamental Grade.
As of this posting, Jan. 8, 2015, I consider MON a C-rated “hold.”
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
