Lombardi: Stock Market Commentary & Forecasts, Financial & Economic Analysis Since 1986

Agriculture

Agriculture refers to the active cultivation of animals, plants, crops, and food for the purposes of selling, processing, and/or producing feed for profit. Agriculture is a blanket term referring to agribusiness and all related industries dealing with the production of food and its various uses.

Why Investors Should Pay Attention to This Diverse Stock

By for Profit Confidential

Business Booming for These Stocks Right NowWith little wind at its back from last year’s exceptional performance, this market is a stock-picker’s market, and one that continues to favor existing winners.

For an existing portfolio of large-cap, dividend-paying blue chips, I don’t see a lot of new action to take right now. The most valuable information for investors is what corporations actually say about their businesses. The outlook for dividends and share repurchases is solid.

Companies like Apple Inc. (AAPL) and Google Inc. (GOOG) get all the headlines, but it’s still very material what a company like E. I. du Pont de Nemours and Company (DD) says about business conditions around the world. Even if you wouldn’t consider DuPont as an investment, the business operates in a number of important industries, so what the company’s management reports could help to inform your market view.

Last year, the company said its total sales grew three percent to $35.7 billion. Five-percent growth in volume was offset by a one-percent decline in local selling prices and the one-percent negative impact of a stronger U.S. dollar.

The standout for DuPont was, once again, the company’s agricultural division, which saw a 13% gain in sales for the year to $11.74 billion. Agriculture also contributed the most to the company’s operating earnings, improving by 16% over 2012 to $2.48 billion.

This year, DuPont expects operating earnings of $4.20–$4.45 per share. This translates to an 8%–15% gain over 2013, which is pretty solid. The company expects 2014 total sales to grow four percent to approximately $37.0 billion, which is after an estimated two-percent decline from divestitures.

Management expects global industrial production to keep … Read More

Where to Look for Profits While Waiting for Stock Market Correction

By for Profit Confidential

dividend yieldFor a company with just one operating division that’s generating meaningful growth, E. I. du Pont de Nemours and Company (DD) seems to have an uncanny ability to appreciate in value on the stock market.

DuPont is a big player in the agriculture sector, and this operating division is somewhat of a proxy on the sell-side industry.

Last quarter, the company reported sales growth of five percent to $7.7 billion. The company’s agricultural division experienced the best gain, with a 15% hike in sales to $1.6 billion.

If institutional investors buy the stock market based on improving balance sheets, DuPont’s fits the bill. The company’s third-quarter cash position soared from $4.3 billion to $7.0 billion.

The stock was trading around $45.00 a share at the beginning of the year, and it is currently trading at approximately $62.00 with a 2.9% dividend yield. For such a mature enterprise, an impressive capital gain like this is indicative of a monetary policy-induced stock market, where even slow-growth enterprises have been bid significantly.

Across the board, Wall Street has been increasing DuPont’s earnings estimates for this year and next. For 2013, total sales are expected to grow approximately three percent, accelerating to 6.3% in 2014.

Current earnings growth consensus for 2014 is approximately 12%, and with a three percent dividend yield, a forward price-to-earnings (P/E) of 14 isn’t unreasonable. (See “My Six Favorite Growing Dividend Payers.”)

These big, brand-name corporations can really pay, but usually only after a major correction or shock that provides a good entry point into the stock market.

Blue chips can trade sideways for considerable periods of … Read More

Booming Agriculture Business Makes This Solid Dividend Payer Even More Attractive

By for Profit Confidential

Booming Agriculture Business Makes This Solid DividendWell, it turns out that third-quarter earnings were pretty good for E. I. Du Pont de Nemours and Company (DD). The company surprised with solid volume growth and its cash balance soared.

DuPont recently broke out of a two-year-long stock market consolidation. Still yielding around three percent, this position is not expensively priced, and its latest numbers were very good, considering the size and maturity of this business.

The company’s third-quarter consolidated sales grew five percent to $7.7 billion. The strongest division was, once again, in agriculture, with a 15% gain in sales to $1.6 billion on stronger volumes and higher pricing in Latin America.

Every single operating division posted improved operating earnings comparatively, except for the company’s performance chemicals business. Sales in Europe, the Middle East, and Africa (EMEA) grew a surprising 10% during the quarter, while sales in North America and the Asia Pacific grew three percent; Latin American sales grew four percent.

Of note was the company’s strong improvement in shareholders’ equity, and as is typical with so many large corporations, DuPont’s cash and cash equivalents balance soared to $7.0 billion, from $4.3 billion at the end of 2012.

The company’s third-quarter dividend was $0.45 a share, compared to $0.43 in the same quarter last year. Another dividend increase is likely within the next two quarters; the company can certainly afford it.

As I stated before, the most important division for DuPont is its agriculture business. Third-quarter expenditures on research and development were $540 million, compared to $521 million in the same quarter last year. Virtually all of the increased spending was dedicated to the company’s agriculture … Read More

Profitable Mid-Cap Drawing Attention to This Unique Sector

By for Profit Confidential

Profitable Mid-Cap Drawing Attention to This Unique SectorEarnings reports are starting to come in for this past quarter—and many are from unique, small- and mid-cap businesses. This is the time when investment opportunities can be plentiful.

Keeping tabs on the reporting is a great way to find new companies for potential investments. The earnings game is managed, but generally speaking, the numbers are the numbers and a great quarter can be a good catalyst for a stock.

One interesting company that just reported another solid quarter of both revenue and earnings growth is Neogen Corporation (NEOG). This company operates in a very specific business area: food safety and animal safety products.

Based out of Lansing, Michigan, Neogen’s food safety division sells diagnostic test kits to detect foodborne bacteria, natural toxins, food allergens, drug residues, and plant diseases, along with sanitation. The company’s animal safety division is involved with animal genomics and sells all kinds of animal healthcare products, diagnostics, pharmaceuticals, veterinary instruments, wound care products, and disinfectants.

This is a good mid-cap business with a track record of increasing its revenues and earnings. The stock’s also been a very strong performer, not only because the company delivers on its promises, but because it’s the kind of enterprise that institutional investors just love to own. Neogen’s 10-year stock chart is featured below:

Neogen Corporation Chart

Chart courtesy of www.StockCharts.com

In its first fiscal quarter of 2014 (ended August 31, 2013), Neogen’s revenues grew a solid 18% to $58.6 million. The company recently digested an acquisition, but company management said it experienced significant growth in core product lines, as well as strong sales outside the U.S. market.

Earnings grew 17% during the … Read More

A Value Play Among Institutions That’s Also Perfect for the Small Investor

By for Profit Confidential

A Value Play Among Institutions That’s Also Perfect for the Small InvestorIf E. I. du Pont de Nemours and Company (DD) didn’t have its burgeoning agriculture business, the stock would be in the tank. Instead, this slow-growth conglomerate has really surprised with its performance on the stock market this year. It’s definitely a value play among institutional investors—and a dividend one at that.

With a current dividend yield of approximately 3.2% and a price-to-earnings ratio of around 12, DuPont is seemingly breaking out of a long-term price consolidation on the stock market. It’s been 13 years since the position convincingly broke through $50.00 a share, and all the while, the company’s agriculture division has been flourishing.

If the rest of the company’s operations could grow, its share price would be much higher.

In the second quarter of 2013, the company’s total revenues actually fell to $9.84 billion, down from $9.92 billion in the second quarter of 2012.

Earnings also fell to $1.03 billion, or $1.11 per diluted share, down slightly from earnings of $1.17 billion, or $1.23 per diluted share, in the comparable quarter last year.

Interestingly, the company’s cash position soared along with shareholders’ equity. (See “Why DuPont’s Earnings Results Are So Typical for This Stock Market.”)

DuPont said that its agriculture sales grew a solid seven percent in the most recent quarter due to rising prices in global seed sales and stronger volumes in insecticides and fungicides. The two latter components are a huge part of global agriculture business.

Revealing the lackluster business conditions in emerging markets (including China, India, Latin America, and Eastern Europe) the company posted a mere one-percent gain in total sales in … Read More

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Why Investors Should Pay Attention to This Diverse Stock

By for Profit Confidential

Business Booming for These Stocks Right NowWith little wind at its back from last year’s exceptional performance, this market is a stock-picker’s market, and one that continues to favor existing winners.

For an existing portfolio of large-cap, dividend-paying blue chips, I don’t see a lot of new action to take right now. The most valuable information for investors is what corporations actually say about their businesses. The outlook for dividends and share repurchases is solid.

Companies like Apple Inc. (AAPL) and Google Inc. (GOOG) get all the headlines, but it’s still very material what a company like E. I. du Pont de Nemours and Company (DD) says about business conditions around the world. Even if you wouldn’t consider DuPont as an investment, the business operates in a number of important industries, so what the company’s management reports could help to inform your market view.

Last year, the company said its total sales grew three percent to $35.7 billion. Five-percent growth in volume was offset by a one-percent decline in local selling prices and the one-percent negative impact of a stronger U.S. dollar.

The standout for DuPont was, once again, the company’s agricultural division, which saw a 13% gain in sales for the year to $11.74 billion. Agriculture also contributed the most to the company’s operating earnings, improving by 16% over 2012 to $2.48 billion.

This year, DuPont expects operating earnings of $4.20–$4.45 per share. This translates to an 8%–15% gain over 2013, which is pretty solid. The company expects 2014 total sales to grow four percent to approximately $37.0 billion, which is after an estimated two-percent decline from divestitures.

Management expects global industrial production to keep … Read More

Where to Look for Profits While Waiting for Stock Market Correction

By for Profit Confidential

dividend yieldFor a company with just one operating division that’s generating meaningful growth, E. I. du Pont de Nemours and Company (DD) seems to have an uncanny ability to appreciate in value on the stock market.

DuPont is a big player in the agriculture sector, and this operating division is somewhat of a proxy on the sell-side industry.

Last quarter, the company reported sales growth of five percent to $7.7 billion. The company’s agricultural division experienced the best gain, with a 15% hike in sales to $1.6 billion.

If institutional investors buy the stock market based on improving balance sheets, DuPont’s fits the bill. The company’s third-quarter cash position soared from $4.3 billion to $7.0 billion.

The stock was trading around $45.00 a share at the beginning of the year, and it is currently trading at approximately $62.00 with a 2.9% dividend yield. For such a mature enterprise, an impressive capital gain like this is indicative of a monetary policy-induced stock market, where even slow-growth enterprises have been bid significantly.

Across the board, Wall Street has been increasing DuPont’s earnings estimates for this year and next. For 2013, total sales are expected to grow approximately three percent, accelerating to 6.3% in 2014.

Current earnings growth consensus for 2014 is approximately 12%, and with a three percent dividend yield, a forward price-to-earnings (P/E) of 14 isn’t unreasonable. (See “My Six Favorite Growing Dividend Payers.”)

These big, brand-name corporations can really pay, but usually only after a major correction or shock that provides a good entry point into the stock market.

Blue chips can trade sideways for considerable periods of … Read More

Booming Agriculture Business Makes This Solid Dividend Payer Even More Attractive

By for Profit Confidential

Booming Agriculture Business Makes This Solid DividendWell, it turns out that third-quarter earnings were pretty good for E. I. Du Pont de Nemours and Company (DD). The company surprised with solid volume growth and its cash balance soared.

DuPont recently broke out of a two-year-long stock market consolidation. Still yielding around three percent, this position is not expensively priced, and its latest numbers were very good, considering the size and maturity of this business.

The company’s third-quarter consolidated sales grew five percent to $7.7 billion. The strongest division was, once again, in agriculture, with a 15% gain in sales to $1.6 billion on stronger volumes and higher pricing in Latin America.

Every single operating division posted improved operating earnings comparatively, except for the company’s performance chemicals business. Sales in Europe, the Middle East, and Africa (EMEA) grew a surprising 10% during the quarter, while sales in North America and the Asia Pacific grew three percent; Latin American sales grew four percent.

Of note was the company’s strong improvement in shareholders’ equity, and as is typical with so many large corporations, DuPont’s cash and cash equivalents balance soared to $7.0 billion, from $4.3 billion at the end of 2012.

The company’s third-quarter dividend was $0.45 a share, compared to $0.43 in the same quarter last year. Another dividend increase is likely within the next two quarters; the company can certainly afford it.

As I stated before, the most important division for DuPont is its agriculture business. Third-quarter expenditures on research and development were $540 million, compared to $521 million in the same quarter last year. Virtually all of the increased spending was dedicated to the company’s agriculture … Read More

Profitable Mid-Cap Drawing Attention to This Unique Sector

By for Profit Confidential

Profitable Mid-Cap Drawing Attention to This Unique SectorEarnings reports are starting to come in for this past quarter—and many are from unique, small- and mid-cap businesses. This is the time when investment opportunities can be plentiful.

Keeping tabs on the reporting is a great way to find new companies for potential investments. The earnings game is managed, but generally speaking, the numbers are the numbers and a great quarter can be a good catalyst for a stock.

One interesting company that just reported another solid quarter of both revenue and earnings growth is Neogen Corporation (NEOG). This company operates in a very specific business area: food safety and animal safety products.

Based out of Lansing, Michigan, Neogen’s food safety division sells diagnostic test kits to detect foodborne bacteria, natural toxins, food allergens, drug residues, and plant diseases, along with sanitation. The company’s animal safety division is involved with animal genomics and sells all kinds of animal healthcare products, diagnostics, pharmaceuticals, veterinary instruments, wound care products, and disinfectants.

This is a good mid-cap business with a track record of increasing its revenues and earnings. The stock’s also been a very strong performer, not only because the company delivers on its promises, but because it’s the kind of enterprise that institutional investors just love to own. Neogen’s 10-year stock chart is featured below:

Neogen Corporation Chart

Chart courtesy of www.StockCharts.com

In its first fiscal quarter of 2014 (ended August 31, 2013), Neogen’s revenues grew a solid 18% to $58.6 million. The company recently digested an acquisition, but company management said it experienced significant growth in core product lines, as well as strong sales outside the U.S. market.

Earnings grew 17% during the … Read More

A Value Play Among Institutions That’s Also Perfect for the Small Investor

By for Profit Confidential

A Value Play Among Institutions That’s Also Perfect for the Small InvestorIf E. I. du Pont de Nemours and Company (DD) didn’t have its burgeoning agriculture business, the stock would be in the tank. Instead, this slow-growth conglomerate has really surprised with its performance on the stock market this year. It’s definitely a value play among institutional investors—and a dividend one at that.

With a current dividend yield of approximately 3.2% and a price-to-earnings ratio of around 12, DuPont is seemingly breaking out of a long-term price consolidation on the stock market. It’s been 13 years since the position convincingly broke through $50.00 a share, and all the while, the company’s agriculture division has been flourishing.

If the rest of the company’s operations could grow, its share price would be much higher.

In the second quarter of 2013, the company’s total revenues actually fell to $9.84 billion, down from $9.92 billion in the second quarter of 2012.

Earnings also fell to $1.03 billion, or $1.11 per diluted share, down slightly from earnings of $1.17 billion, or $1.23 per diluted share, in the comparable quarter last year.

Interestingly, the company’s cash position soared along with shareholders’ equity. (See “Why DuPont’s Earnings Results Are So Typical for This Stock Market.”)

DuPont said that its agriculture sales grew a solid seven percent in the most recent quarter due to rising prices in global seed sales and stronger volumes in insecticides and fungicides. The two latter components are a huge part of global agriculture business.

Revealing the lackluster business conditions in emerging markets (including China, India, Latin America, and Eastern Europe) the company posted a mere one-percent gain in total sales in … Read More

Why China Wants Our Raw Materials So Desperately

By for Profit Confidential

090813_PC_leongAmerica has a national debt that is nearing $17.0 trillion. The Chinese own a good portion of this debt. The country also has about $3.5 trillion in foreign exchange reserves at its disposal, according to the South China Morning Post. (Source: “Beijing to create forex investment agency,” China Economic Review, August 7, 2013.)

That’s a lot of money that needs to be invested. But according to the article, the People’s Bank of China (PBC) is looking at the development of a new unit that will help to invest the funds. Currently, investing the reserves is the responsibility of China Investment Corporation, which has invested about $480 billion.

What I see is this: the continued movement of invested capital into foreign countries by China is a strategy for diversification and a means by which the country can get its hands on raw materials and intellectual property. We saw this with the acquisition of mining and oil companies in North America, along with major investments in the oil fields and mines in South Africa.

Call it the “Red Invasion,” but I expect foreign acquisitions to pick up going forward, especially with the creation of another agency by the PBC. Of course, China has its eyes on many companies, but receiving approval for the takeovers is another question.

Even the proposed takeover of pork producer Smithfield Foods, Inc. (NYSE/SFD) by Shuanghui International Holdings Limited was met with some resistance, but now it looks like the deal will go through.

I expect China will focus on acquiring raw materials with its reserves—iron, copper, oil—along with agriculture and industrial outlets. I wouldn’t be … Read More

How Bakken Oil Is Revitalizing the Prairie Economy

By for Profit Confidential

090813_PC_clarkCalling North Dakota “big sky country” would be an understatement. The clouds hang low and there is a density to them that sparks quick contemplation of the floodgates they can unleash.

There is a raw beauty to the prairies, with lush fields of wheat and grasses almost ready to be harvested.

In the Bakken oil region, shiny new pumpjacks litter the landscape. And it’s not just in North Dakota, but Montana and the Canadian provinces of Saskatchewan and Manitoba as well. The commodity is revitalizing the entire region.

But what stands out aren’t the pumpjacks, but all the activity going on around them. It’s all the services that are required to extract and move the oil that grabs your attention, and there is big money being spent to make it happen.

Also, the endless lines of oil railcars, with their shiny new paintjobs, line the Bakken region. One young man I spoke with was particularly enthusiastic about his prospects in the railroad services business. He said that his employer can’t find enough workers for the business they have. He was in full recruitment mode.

Williston is a small, busy town that is very much dedicated to serving the needs of agriculture and the oil patch. Of particular note is the construction going on; countless long-stay apartment buildings are in construction. An existing building advertised a furnished apartment for $700.00 a week.

Also noteworthy is the presence of oil and gas services companies like Halliburton Company (HAL), which has a substantial presence on the outskirts of town. Oil services are a big deal in the Bakken oil region. Everything has to … Read More

Why This Sector Will Always Offer a Buying Opportunity

By for Profit Confidential

Offer a Buying OpportunityThe S&P 500 may be nearing a new record high, but trust me when I say there’s some nervousness growing in the market. I really don’t blame you if you want to take some profits.

In fact, I insist.

When I look for sectors that I feel are less sensitive to what the global economy does, I always come back to the food sector as a buying opportunity.

Simply put, people have to eat. They really don’t care about how the economies are faring, whether there is jobs growth, or if the world central banks are pumping trillions into the global economic system. People have to eat, and that’s where I see a buying opportunity.

With this thought in mind, I continue to like the agriculture sector as a longer-term buying opportunity; farm fields will need to be plowed to produce the massive crop yields that will be needed to feed a growing world population.

A company that I feel could lend itself to some good above-average longer-term gains and is a possible buying opportunity is West Fargo, North Dakota-based Titan Machinery Inc. (NASDAQ/TITN). With a market-cap of $433 million and well down from its 52-week high of $32.00, there’s good potential here. North Dakota, of course, is known for its burgeoning shale oil production, which could offer another buying opportunity. (Read “Why This Cold Prairie State Is an Investment Hotspot.”)

Titan not only distributes and sells new and used agricultural equipment to markets and farmers in America and Europe, but the company also sells construction equipment, which given the major infrastructure buildup worldwide, could really drive the … Read More

Who Wins in an Artificially Monetized World?

By for Profit Confidential

Who Wins in an Artificially Monetized WorldIf there is going to be genuine economic growth in mature economies, the leadership will have to come from the U.S. economy.

The convulsions taking place in the Japanese capital markets are emblematic of the monetary exuberance that both captivates investor sentiment and distorts its reality.

It’s a trader’s paradise with such volatility, based not on Main Street fundamentals, but on the ability and willingness of policymakers to puppeteer capital markets.

While liquidity and certainty are hugely important to investor sentiment, all the financial engineering should soon produce its own blowback. Investment risk in capital markets remains high.

Investor sentiment among institutional investors in U.S. equities still has strength to carry this market higher if corporations perform.

Corporate earnings are managed, but that’s how the system works. There’s been a paring down of earnings estimates for the second quarter.

E. I. du Pont de Nemours and Company (NYSE/DD), or simply DuPont, reduced its expectations for its first half of operating profits due to the weather (the wettest spring in almost 120 years in the farmbelt states). The company said full-year earnings per share will be at the low end of its forecast, between $3.85 and $4.05. Agriculture is the company’s most important operating division. (See “Why DuPont’s Earnings Results Are So Typical for This Stock Market.”)

Capital markets, especially the equity market, are looking for catalysts. From what I read, there are still great expectations for the Japanese equity market. Unscientific investor sentiment among fund managers maintains an outlook of perpetual volatility in that market.

Getting back to the U.S. market, economic news is not robust, but there … Read More

Why DuPont’s Earnings Results Are So Typical for This Stock Market

By for Profit Confidential

DuPont’s Earnings Results Are So TypicalThe stock market’s reaction to E. I. du Pont de Nemours and Company’s (NYSE/DD) earnings results was solid, especially considering the company’s five-percent dividend increase.

For E. I. du Pont, more commonly known as DuPont, first-quarter revenues for 2013 grew two percent to $10.4 billion. Like many large-caps, currency translation was an issue.

Of this $10.4 billion, $4.85 billion represented North American sales, which grew a solid eight percent (four percent due to rising prices and four percent due to better volumes). Latin America also saw strength, but Europe and Asia, in particular, were weak points.

DuPont’s record performance in its agriculture division was the standout once again. Global agriculture sales grew 14% to $4.7 billion; equally as impressive were the company’s agriculture operating earnings, growing 13% to $1.5 billion.

Other than a two-percent gain in DuPont’s industrial biosciences division, operating earnings at all of DuPont’s other divisions were down, particularly in performance chemicals.

DuPont reaffirmed its 2013 full-year outlook, which reassured the stock market. Along with its dividend increase, the company is basically offering a high single-digit potential return this year. You could argue it’s already accomplished this. The company’s stock chart is featured below:

DD Dupont co NYSE stock market chart

Chart courtesy of www.StockCharts.com

Weakness in DuPont’s non-agricultural businesses is definitely an issue. To me, the stock looks fully priced if not a tad expensive, given the company’s latest earnings report.

Without question, if business were to pick up in DuPont’s industrial divisions, it would easily move higher on the stock market.

The company’s shifting focus into agriculture and food-related products is a good move. But in terms of investment risk, such a large … Read More

How Wall Street and Agriculture Can Boost Your Returns

By for Profit Confidential

How Wall StreetThe agriculture trade is slowly heating up, and Wall Street is fixing to serve.

Wall Street is particularly good at feeding the marketplace what it wants to consume. Agriculture doesn’t have the appeal like technology, but this is going to change.

Monsanto Company (NYSE/MON) reported outstanding financial results in its first quarter of 2013. But it’s often not front-page news, because agriculture is boring to some—which is such a mistake.

Monsanto’s net sales grew a solid 15% to $5.5 billion. Earnings rose an outstanding 22% to $1.5 billion. Corn seed sales were the strongest, and cash balances and shareholder’s equity rose significantly.

Forgive my enthusiasm, but it’s tough these days to find double-digit good news.

Monsanto is a company that’s not without controversy. It isn’t a Wall Street favorite, but it should be. Agriculture is ripe for more gains.

One very interesting small company that just came to market out of McLean, Virginia is Gladstone Land Corporation (NASDAQ/LAND). This firm buys farmland, and then leases it out to commercial or tenant farmers.

Gladstone, so far, owns approximately 1,630 acres, which isn’t a huge amount. Currently, its agriculture is mostly row-crop fruits and vegetables, but management plans to diversify operations going forward. The company’s new listing performance is outlined in the stock chart below:

LAND Gladstone land Corp Nasdaq stock chart

Chart courtesy of www.StockCharts.com

Still very small but with a ton of potential, you are going to see Wall Street bring many more of these types of businesses to market. There is a growing appetite for agriculture-related businesses, and the investment theme has staying power.

Wall Street has been selling off equities this earnings season, and that’s … Read More

Agriculture the Key to Real Portfolio Growth?

By for Profit Confidential

Key to Real Portfolio GrowthIf you’ve ever been into horses, you know that you can spend as much money as you’ve got—and plenty more—on their care. Personally, I like draft horses; Clydesdales, in particular. But the thing about a draft horse is that it can eat a lot of food. And during the drought last year, hay costs soared.

Agriculture, as an investment theme, is consistently on my mind, but it is a stock market sector that is limited. The marketplace is dominated by only a handful of companies. There aren’t a lot of publicly traded agriculture stocks that would be considered mid-cap; the same goes for small-cap companies.

On the stock market, E.I. du Pont de Nemours and Company (NYSE/DD), or DuPont, hasn’t been great, though its dividends have. Looking at the company’s agriculture-specific business, which represents approximately one-fifth of total revenues, business conditions are the strongest of all divisions. (See “Why Dividend Increases and Stock Buybacks Will Continue.”)

According to the company, 2012 fourth-quarter agriculture revenues grew to $1.5 billion, for a solid gain of 18%, of which, 11% was due to volume and seven percent was due to higher prices.

For the year, total agriculture revenues were $10.4 billion, representing growth of 14% on an eight-percent gain in volume and a six-percent gain in prices. (Who says there’s no inflation?) The company reported that its “Pioneer” seeds are benefiting strongly from pricing gains in corn and soybeans. Crop protection sales are also growing on “strong demand” for insecticides and herbicides in all regions. (Source: “DuPont & Co. 4Q and 2012 Earnings,” E.I. du Pont de Nemours and Company … Read More

Currency Wars: Where Investors Are Vulnerable

By for Profit Confidential

Where Investors Are Vulnerable“The supreme art of war is to subdue the enemy without fighting.” The author of this quotation is Sun Tzu (544–496 BCE), a Chinese general and the author of The Art of War, the classic manual on warfare tactics.

Eons ago, I had a summer job in golf course construction. It was tough, dirty work, but it was great to learn how a golf course gets made. There was a lot of manual labor, but to move stuff around, my boss bought Kubota tractors. We pounded the daylights out of those machines. They were tough little tractors, for sure.

Kubota Corporation (NYSE/KUB) is, of course, a Japanese outfit. The company’s shares have been soaring on the stock market—a massive breakout after a seven-year consolidation. The entire Japanese stock market has broken out.

Prospects for the Japanese economy are a little brighter, but the soaring Japanese stock market also has to do with the weaker yen. Japanese Prime Minister Shinzo Abe wants to employ massive fiscal and monetary stimulus this year and a weaker yen policy against the U.S. dollar.

Bloomberg quoted Kubota’s President, Yasuo Masumoto,noting the company is expecting an extra 20% gain in revenues starting this fiscal year because of the yen’s drop compared to the U.S. dollar. Kubota’s stock chart is featured below:

KUB Kubota corp stock market chart

Chart courtesy of www.StockCharts.com

Kubota is pining to get into big tractors (those used in agriculture), and management is targeting the U.S. market big-time. Such an outspoken and decisive new policy to weaken the yen versus the U.S. dollar, to sell more tractors, to boost the stock market and everything else, is … Read More

The Federal Reserve Works, But Guess Who Has to Pay for It?

By for Profit Confidential

But Guess Who Has to Pay for ItThanks to the Federal Reserve, borrowing costs are down. But the last time I took my vehicle in for service, it cost me well over $1,000 because a few parts had to be replaced. I have a trustworthy mechanic, but it seemed like a lot for what got done.

My insurance bill was up quite a bit from the previous year and what really bugged me was that it was with less coverage. My optometrist, dentist and veterinarian are all charging more for their services. And my plumber, God bless him, swims in his heated outdoor pool in winter with snow on the ground. Point being—I don’t care what any statistic says, there is price inflation in the marketplace right now. More than is being admitted to by the Federal Reserve or comprised in the Consumer Price Index (CPI). And we haven’t even gotten to fuel costs yet.

There is nothing wrong with a little price inflation. The Federal Reserve, like many other central banks, targets a two-percent annual inflation rate, but the big problem is inflation in the face of stagnant incomes. That’s wealth destruction and the Federal Reserve can’t do a thing about it.

Compared to other economies, the U.S. economy has always been good at righting itself after a shock or recession. But now, it really is different. There is little to no financial flexibility in fiscal and monetary policy. The Federal Reserve created the money and it’s been spent. Corporations and Wall Street benefitted significantly, but the average consumer is stuck—and with the bill too.

The headlines show tame inflation numbers, but we all know … Read More

An Industry That’s Booming in This
Economy? Bet You Can’t Think of It

By for Profit Confidential

It’s difficult in this economy to come across businesses that are not just doing well, but also doing really well at a time when traditional industry and the services sector are slow. Yet, they’re out there and it’s only because most people don’t see the products that they don’t notice.

The Great Crash of 2014

A stock market crash bigger than what happened in 2008 and early 2009 is headed our way.

In fact, we are predicting this crash will be even more devastating than the 1929 crash…

…the ramifications of which will hit the economy and Americans deeper than anything we’ve ever seen.

Our 27-year-old research firm feels so strongly about this, we’ve just produced a video to warn investors called, “The Great Crash of 2014.”

In case you are not familiar with our research work on the stock market:

In late 2001, in the aftermath of 9/11, we told our clients to buy small-cap stocks. They rose about 100% after we made that call.

We were one of the first major advisors to turn bullish on gold.

Throughout 2002, we urged our readers to buy gold stocks; many of which doubled and even tripled in price.

In November of 2007, we started begging our customers to get out of the stock market. Shortly afterwards, it was widely recognized that October 2007 was the top for stocks.

We correctly predicted the crash in the stock market of 2008 and early 2009.

And in March of 2009, we started telling our readers to jump into small caps. The Russell 2000 gained about 175% from when we made that call in 2009 to today.

Many investors will find our next prediction hard to believe until they see all the proof we have to back it up.

Even if you don’t own stocks, what’s about to happen will affect you!

I urge you to be among the first to get our next major prediction.
See it here now in this just-released alarming video.

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