Cramer’s Ag Breakout Stock Plays
“The rolling bull market continues,” Jim Cramer said on a recent “Mad Money” TV show. He told viewers with the market only up slightly, the major money was moving out of tech, oil and bank stocks, and into a new space that’s ready to soar. This time the market is experiencing leadership from the agriculture complex. The cause of the strength in ag is due to news from the Department of Agriculture which raised its sport price forecast last week, citing production shortfalls. Following that news, shares of genetically modified seed maker Monsanto Company (NYSE:MON) traded up, confirming the strength in the sector. Cramer said Monsanto is a solid buy, after the company’s management said it expects to double its gross profit by 2012. Another reason to like Monsanto is the rally in corn prices, which jumped 21% to $3.73 in October. December futures now trade at $4.27. “The company makes the best genetically engineered corn seed, the commodity’s lading value has hurt Monsanto,” Cramer said. He also recommended the fertilizer stocks like Potash Corp./Saskatchewan (USA)(NYSE:POT), Agrium Inc. (NYSE:AGU) and Mosaic Company (NYSE:MOS). Cramer told viewers that Potash is the cheapest in the space, but his favorite name is Terra Nitrogen Company L.P. (NYSE:TNH) for its 6.4% dividend yield. Lastly, Cramer said if you want to play ag you should buy Deere & Company (NYSE:DE). “This stock may be flirting with its 52-week high, but DE is up just 28% for the year. That’s still down 48% from 20 months ago,” Cramer said. He pointed out that Deere no longer suffers from a strong dollar, and with only 12 analysts rating the stock a hold, there’s plenty of room for upgrades. Cramer thinks Deere will tell investors on its Nov. 25 earnings report that its construction and forestry division has finally bottomed. He recommended buying Deere ahead of its earnings report due out in five days. Get the scoop on tomorrow’s hottest trade ideas – TODAY! BeaconEquity.com PREMIER PICKS have an amazing track record. Join this select group and ride the profit wave!
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