Monsanto -7%

Monsanto (MON) is down 7% today on the news of sharply lower guidance. A reader writes:

I wrote you a few weeks ago about MONSANTO. And you were talking about lowered guidance, and how it’s like “cockroaches”, they keep coming out. Well, you were right. Thanks for the tip. I decided to sell shortly afterwards — it was difficult because I felt that I had spent so much time understanding their business and the prospects, but you were right, the stock has no idea I own it.

The point is that companies aren’t like sports teams that can suddenly rally. If there’s one problem you see, there are usually several more you don’t see (like cockroaches).
Just because a stock is down from its highs doesn’t mean it’s cheap. Monsanto missed its last two earnings reports and that was a tip-off to today’s news.

Posted by on May 27th, 2010 at 1:19 pm

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