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Why Did Monsanto Stumble in 4Q15 and Fiscal 2015?

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Oct. 12 2015, Updated 8:07 a.m. ET

Monsanto’s price movement

Monsanto Company (MON) has a market cap of $41.2 billion. Monsanto’s YTD (year-to-date) price movement has gone down every quarter of 2015, with a fall in revenue of 5.4% in 2015 from 2014. After the 4Q15 earnings report, Monsanto rose by 0.6% to close at $88.06 per share as of October 7, 2015. The price movement on weekly, monthly and YTD bases is 3.8%, -7%, and -24.8%, respectively. It’s trading at 2.7% on a trailing-five-day basis.

Technically, it has broken all major support and is trading below all moving day averages. Currently, it’s trading at 0.3% above the 20-day moving average, -7.4% below the 50-day moving average, and -20.3% below the 200-day moving average.

The iShares MSCI Global Agriculture Producers ETF (VEGI) invests 15.8% of its holdings in Monsanto. The ETF tracks a market-cap-weighted index of companies that are sensitive to agricultural commodity prices. The iShares U.S. Basic Materials ETF (IYM) invests 8.3% of its holdings in Monsanto.

Monsanto Company’s (MON) competitors and their market caps:

  • Dow Chemical Company (DOW) – $55 billion
  • DuPont (DD) – $50.1 billion
  • Syngenta (SYT) – $30.4 billion
  • Scotts Miracle-Gro Company (SMG) – $3.9 billion
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Monsanto’s performance in 4Q15 and fiscal 2015

According to Monsanto’s 4Q15 earnings report, net revenue fell to $2.4 billion in 4Q15, a fall of 10.5% from $2.6 billion in 4Q14. Net revenue from soybean seed and traits, cotton seed and traits, and vegetable seeds fell by 18.6%, 50%, and 4.8%, respectively, in 4Q15 from 4Q14. Net income is still a negative number and fell to -$495 million in 4Q15.

In fiscal 2015, Monsanto reported a net revenue of $15 billion, a fall of 5.4% on a yearly basis. Revenue from corn seed and traits, cotton seed and traits, and vegetable seeds fell by 7%, 21.4%, and 5.9%, and the revenue from soybean seed and traits rose by 8.3% in fiscal 2015. Gross profit and EPS (earnings per share) reduced by 4.6% and 7.9%, respectively, in fiscal 2015. Cash and cash equivalents rose to $3.7 billion in fiscal 2015, a rise of 56.4% on a yearly basis. The current ratio rose by 8.5% in fiscal 2015.

On August 4, 2015, the company announced a quarterly dividend of 54 cents per share on Monsanto common stock.

About Monsanto

Monsanto is a sustainable agricultural company. It provides farmers with a range of corn, soybean, cotton, wheat, canola, sorghum, and sugar cane seeds.

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