Is Monsanto A Buy At Multi-Year Lows?

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Commodity Trading Research
Is Monsanto A Buy At Multi-Year Lows?
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• Hi, My name is Justin and Im with Commodity
  Trading Research, today were reviewing our
  recently published article

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• Is Monsanto A Buy At Multi-Year Lows?

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• Without question, Monsanto MONis one of the most
  controversial companies in existence.For years
  the Agricultural chemical/bio-technology giant
  has faced harsh criticism due to their involvement

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• in genetically modified organisms (GMOs). Ill
  assume you know what GMOs are (and the
  controversy surrounding them), and not waste
  precious time explaining that complicated matter
  today.

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• Instead, lets discuss Monsantos new problem

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• The companys immensely popular Roundup weed
  killer has become the subject of a class-action
  lawsuit. Plaintiffs assert Monsanto is
  intentionally misleading consumers about the
  safety of Roundup.

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• They claim the key ingredient in Roundup,
  glyphosate,has links to a host of illnesses,
  including cancer and autism.

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• I have to admit, the accusations are a bit
  unnerving

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• Roundup is used around homes, gardens, golf
  courses, etc.- the world over. Heck, I use it
  around my home to kill invasive weeds- and it
  does a great job.

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• Monsanto claims directly on the bottle that
  glyphosate is safe because it targets an enzyme
  in plants that is not present in people or pets.

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• However, a few prominent scientists, along with
  the World Health Organization, now disagree with
  the companys safety claims.

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• In my opinion, the real bombshell comes from the
  factan estimated 100 million tons of Roundup are
  sprayed on US corn, soybean, canola, and sugar
  beet crops each and every year.

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• Monsantos Roundup Ready GMO crops are designed
  to withstand the herbicide while unwanted weeds
  shrivel and die.
• Heres the deal

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• A recent study reveals glyphosate residue shows
  up in human urine tests. Could it be that unless
  youre diligent in not eating any GMO sourced
  foods(and have been for the past 15 years, when

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• Roundup Ready crops were introduced) youhave
  traces of glyphosate floating around in your
  body? And if you work with the chemical on an
  occupational basis, do you have considerably more?

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• If so, is it a cause for concern?

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• Maybe, maybe not...
• For now it depends on whose research you believe.
  Both Monsanto and opposing scientists have reams
  of data supporting their arguments.

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• All I know is that as a father of two young
  children Im a bit concerned about the issue. At
  the very least I wont be using Roundup around my
  house until this issue is resolved.

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• But let me be clear about something
• Im not a scientist or any other kind of expert
  on Roundup or GMOs. Im just a concerned
  consumer wondering if the accusations against
  Roundup are true.

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• That brings me to the investment thesis
  surrounding the company

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• Once word of this class action suit spreads,
  plenty of other consumers will likely rethink
  their use of Roundup as well. Its not outlandish
  to think Monsantos herbicide sales could decline

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• significantly due to this development- even if a
  verdict isnt reached for years (which is likely
  the case). Keep in mind, Roundup sales accounted
  for roughly 4.8 billion worth of revenues in
  fiscal

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• 2015, which is about a third of Monsantos total
  sales. Shares of the Ag giant have already taken
  quite a hit the past few months. See for yourself

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• MON started diving in June 2015 when investors
  realized slowing corn seed sales wouldbe a big
  financial headwind going forward.

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• Those worries came to fruitionwhen the company
  reportedfiscal fourth-quarter 2015 sales of 2.3
  billion- 48 lower than the previous quarter.

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• Due to these lousy results, Monsanto is cutting
  2,600 jobs in a restructuring bid.
• Heres the question

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• Is MON a good buy at these multi-year low
  prices? First of all, the company is trading at
  just 14x forward earning, which is cheaper than
  Ag rivals Dupont DD, and Sygenta SYT.

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• So if youre interested in investing in a company
  thats trying to feed a quickly growing globally
  population via GMOs, now may be your time to
  strike in MON.

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• Its also important to note the company just
  introduced a 3 billion share buyback program.
  Clearly, Monsanto thinks its shares are
  undervalued at these levels as well.

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• However, you just cant ignore the litigation
  risks MON faces going forward

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• Given burgeoning class action lawsuits against
  the company,their legal defense expense will
  likely rise considerably. That factor mixed with
  declining Roundup pricing and sales, and its not

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• out of line to think MON still has more downside
  ahead of it. Whats your decision?

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• Personally, Im steering clear of MON until I
  see more clarity on the Roundupissue. There are
  plenty of other value investment opportunities
  out there that dont have huge litigation risks
  attached to it.

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• However, I have a feeling most investors will be
  more attracted to the value proposition MON
  currently provides.

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