Biotech Values

[DewDiligence]

I am entirely new to MON, from all aspects - science and $$$. But, the current share price is near the 52-week low. Is this a buying opportunity?

Logically, it should be; however, investors have now been burned with lowered guidance twice in the last three months, and that won’t sit well. As a result, MON is likely to remain in the Wall Street “penalty box” for some time.

If you have a long horizon, MON could still be a great stock, of course. There is no company I know of who’s a bigger beneficiary of The Global Demographic Tailwind: the emerging middle class in much of the developing world that will consume more food and, specifically, more protein-rich food, which requires vastly larger amounts of feed crops.*

MON has the world’s best technology for increasing crop yields—no contest. Worldwide, higher crop production without higher yields is mathematically impossible, so the basic premise for the stock still holds, and I expect MON will sport an enterprise value of $100B by the end of the current decade (up from about $30B now). But even this might not prevent the stock from being perceived as “dead money” for a while, so I cannot bang the drum for aggressive and immediate buying.

*Each incremental pound of meat consumption requires 2-8 incremental pounds of feed grain.