Risk Reversal Taking Place In Monsanto

St. Louis, Missouri based fertilizer company Monsanto Company (MON) has been an abysmal performer year-to-date, falling more than 32% in 2010. It appears that a risk reversal is taking place in the shares, however, as they have gained 10.34% in the last month, with all of the gains coming since July 6th. Goldman Sachs Group, Inc. (GS) has been pounding the table on this name for some time, arguing that all of the bad news at the company has been priced into the stock. The other catalyst that Goldman has cited is a dramatic rally in corn prices.



Goldman analysts wrote that "rising corn prices inflate the value of MON's biotechnology and could help moderate farmer resistance to higher product prices for its new technology." Goldman has a 12-month price target on Monsanto shares of $65, which implies a healthy return with shares trading around the $55 level currently.

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Risk Reversal Taking Place In Monsanto originally appeared on BloggingStocks on Mon, 19 Jul 2010 17:30:00 EST. Please see our terms for use of feeds.

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