Replies to post #179829 on Biotech Values

[Biowatch]

MON at high price. M&A is too currently. The buyback is probably the better choice.

The buyback may be to make the EPS look better, but it also cuts back on the amount of dividends they need to pay out.

[DewDiligence]

Re: MON's leveraging of balance sheet

…that Monsanto is going into the market right now a scoop up around $6 Billion of shares (10% of the company) tells me that they need these shares off the market to meet the EPS numbers.

You have the story backwards! MON was able to issue aggressive new 5-year EPS guidance (doubling of EPS from FY2014 to FY2019) because of the strongly accretive effect of share buybacks.

Monsanto got slammed pretty good by both Fitch and S&P…

That might be a concern for the bondholders, but not the stockholders. Many companies spend too much time worrying about small changes in their credit rating and end up needlessly sacrificing profitability.

[MON’s] long rates don't seem like a bargain in my opinion.

Couldn’t disagree more. The 20-, 30- and 50-year interest rates on MON’s new bonds shown in #msg-103764173 are superb for MON and disasters-in-waiting for the bond buyers, IMO.

What would you have considered good rates for MON on these tranches? Just curious.