DJIA 9091.52 +36.37 (+0.40%) S&P 500 1106.64 -1.50 (-0.14%) Nasdaq 1848.07 -16.30 (-0.87%) Value Line ndx 982.14 -1.01 (-0.10%) 30-Year Bond 101 7/32 -27/32 6.04% Yield
Chemicals and life sciences company DuPont <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DD)") else Response.Write("(NYSE: DD)") end if %> jumped $5 7/16 to $79 1/2 after saying it will divest itself of its Conoco oil production and refining unit, starting with an initial public offering of a 20% stake before the end of the year. The remaining stake in the company will also eventually be sold, the company said. The move reinforces DuPont's drive to move away from its image as a cyclical chemical giant and focus its business on the growing biotech and agricultural products sector. By 2002, CEO Charles Holliday expects 30% of DuPont's profits will come from its life sciences unit, up from around 20% in fiscal 1997. Separately, Barron's speculated the company may use the money from the divestiture to expand its biotech business, possibly by acquiring Monsanto Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MTC)") else Response.Write("(NYSE: MTC)") end if %> or Zeneca Group PLC <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ZEN)") else Response.Write("(NYSE: ZEN)") end if %>.
Oilfield services firm Western Atlas <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: WAI)") else Response.Write("(NYSE: WAI)") end if %> picked up $11 1/2 to $92 7/8 after agreeing to a merger with Baker Hughes <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BHI)") else Response.Write("(NYSE: BHI)") end if %> in a stock swap valued at $5.5 billion. Each Western Atlas share will be converted into 2.4 shares of Baker Hughes, giving Western Atlas shareholders a 44% stake in the combined company. The deal effectively values Western Atlas at $98.70 per share -- a 21% premium to Western Atlas' closing price of $81 3/8 per share on Friday. The new firm, which will keep the Baker Hughes name, will have estimated fiscal 1998 revenues of $6.5 billion and will generate $135 million in "consolidated benefits" in the first year. Shares of Western Atlas' seismic data acquisition and analysis rivals also gained on speculation that more consolidation is in store. Petroleum Geo-Services <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: PGO)") else Response.Write("(NYSE: PGO)") end if %> rose $1 3/4 to $74, Veritas DGC <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: VTS)") else Response.Write("(NYSE: VTS)") end if %> added $2 5/16 to $58 3/16, and Geophysique S.A. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GGY)") else Response.Write("(NYSE: GGY)") end if %> advanced $2 15/16 to $34 3/16.
QUICK TAKES: Chicago-based Baby Bell Ameritech <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AIT)") else Response.Write("(NYSE: AIT)") end if %> jumped $2 1/8 to $46 after agreeing to merge with SBC Communications <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SBC)") else Response.Write("(NYSE: SBC)") end if %>. The $62 billion merger would give the combined company 57 million access lines and 8.9 million wireless customers, resulting in combined 1997 pro forma revenues of $40.5 billion and net income of $5.54 billion... PC maker Apple Computer <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AAPL)") else Response.Write("(Nasdaq: AAPL)") end if %> gained $1/2 to $30 15/16 as interim CEO Steve Jobs outlined the most recent update of its Macintosh operating system. The system, to be called MacOS 10X, will be released in Q3 of 1999... Busline Greyhound Lines <% if gsSubBrand = "aolsnapshot" then Response.Write("(AMEX: BUS)") else Response.Write("(AMEX: BUS)") end if %> motored $13/16 higher to $6 3/16 after receiving a favorable write-up in the latest edition of Barron's.
Paper bag and corrugated cardboard maker Stone Container Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: STO)") else Response.Write("(NYSE: STO)") end if %> moved up $2 5/8 to $20 5/8 after agreeing to merge with paper and paperboard manufacturer Jefferson Smurfitt Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: JJSC)") else Response.Write("(Nasdaq: JJSC)") end if %> in a stock and debt deal valued at $6.37 billion... General Motors <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GM)") else Response.Write("(NYSE: GM)") end if %> gained $2 11/16 to $71 3/8 after analysts told the Wall Street Journal that the automaker is "on the verge of unleashing a tremendous amount of shareholder value," which could involve the spin-offs of its Delphi Automotive Systems and Hughes Electronics units... Electric power provider Orange and Rockland Utilities <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ORU)") else Response.Write("(NYSE: ORU)") end if %> tacked on $11 1/16 to $53 5/16 after Consolidated Edison <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ED)") else Response.Write("(NYSE: ED)") end if %> agreed to acquire all of the company's outstanding shares for $58.50 per share in cash.
Music, film, and TV producer Polygram N.V. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: PLG)") else Response.Write("(NYSE: PLG)") end if %> climbed $2 7/16 to $52 1/8 on reports that Canadian spirits and entertainment company Seagram Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: VO)") else Response.Write("(NYSE: VO)") end if %> is close to acquiring the firm for $9 billion to $10 billion, according to Bloomberg News, which cited "people familiar with the situation"... Client/server software developer Phoenix International <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PHXX)") else Response.Write("(Nasdaq: PHXX)") end if %> tacked on $1 1/2 to $29 after announcing a three-for-two stock split... The American depositary shares of Japanese automaker Nissan Motor <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: NSANY)") else Response.Write("(Nasdaq: NSANY)") end if %> moved up $1 3/16 to $7 9/32 after Germany's Daimler-Benz <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DAI)") else Response.Write("(NYSE: DAI)") end if %> confirmed that it is in talks regarding a possible alliance with Nissan's diesel truck unit.
Genetic seed developer AgriBioTech Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ABTX)") else Response.Write("(Nasdaq: ABTX)") end if %> grew $2 3/4 to $16 5/8 after Piper Jaffray upgraded the company to "strong buy" from "buy" and set a 12-month price target of $25 per share. Also helping the stock was speculation that it may be an acquisition target after Monsanto's <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MTC)") else Response.Write("(NYSE: MTC)") end if %> purchases of DeKalb Genetics <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DKB)") else Response.Write("(NYSE: DKB)") end if %> and Delta Pine and Land <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DLP)") else Response.Write("(NYSE: DLP)") end if %>. For more on Monsanto, see tonight's "Fool on the Hill" column below... Residential and commercial real estate developer Castle & Cooke Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CCS)") else Response.Write("(NYSE: CCS)") end if %> gained $1 7/8 to $18 7/8 after announcing a plan to buy back up to 3 million of its common shares, or 15% of the shares outstanding... The American depositary shares of French telecommunications equipment maker Alcatel Alsthom <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ALA)") else Response.Write("(NYSE: ALA)") end if %> increased $1 11/16 to $41 1/2 after Salomon Smith Barney raised its price target on the stock ahead of next month's spin-off of the company's GEC Alsthom energy and transport joint-venture with Britain's General Electric Co. PLC.
Biopharmaceutical company Synaptic Pharmaceutical Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SNAP)") else Response.Write("(Nasdaq: SNAP)") end if %> was lifted $5/8 to $12 3/4 after reporting Q1 EPS of $0.04, beating the $0.01 expected by the sole analyst surveyed by First Call... Printing, scanning, and copying software developer Xionics Document Technologies <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: XION)") else Response.Write("(Nasdaq: XION)") end if %> rose $19/32 to $6 1/16 after PC, server, and printer maker Hewlett-Packard <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: HWP)") else Response.Write("(NYSE: HWP)") end if %> agreed to incorporate Xionics' technology into its LaserJet 8000 printer... Internet animation technologies firm 7th Level <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SEVL)") else Response.Write("(Nasdaq: SEVL)") end if %> added $15/32 to $6 27/32 after reporting a Q1 loss of $0.18 per share versus a loss of $0.48 per share a year ago.
Ratings Movers: American Dental Partners <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ADPI)") else Response.Write("(Nasdaq: ADPI)") end if %> rose $1 to $18 5/8 after Piper Jaffray started coverage of the dental practice management company with a "strong buy" rating... 3D Systems Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TDSC)") else Response.Write("(Nasdaq: TDSC)") end if %>, which makes systems for creating 3-D models using computer-aided drawing (CAD) data, tacked on $1/2 to $9 1/2 after being upgraded to "accumulate" from "maintain" by A. G. Edwards... Urological disease treatment device maker Urologix Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ULGX)") else Response.Write("(Nasdaq: ULGX)") end if %> advanced $5/8 to $9 1/16 after A.G. Edwards started coverage with a "maintain" rating... Computer Learning Centers <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CLCX)") else Response.Write("(Nasdaq: CLCX)") end if %> rose $13/16 to $16 11/16 after BancAmerica Robertson Stephens upgraded the provider of information technology education services to "buy" from "long-term attractive"... Oil and gas driller Nabors Industries <% if gsSubBrand = "aolsnapshot" then Response.Write("(AMEX: NBR)") else Response.Write("(AMEX: NBR)") end if %> was lifted $1 3/16 to $26 13/16 after Morgan Stanley Dean Witter raised its rating on the company to "strong buy" from "outperform."
Consumer products company Sunbeam Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SOC)") else Response.Write("(NYSE: SOC)") end if %> lost $2 1/16 to $25 3/4 after reporting a Q1 loss of $0.09 a share (before charges) -- analysts had expected a profit of $0.21 even after two earlier earnings warnings -- and after announcing that it expects 1998 EPS of around $1.00 (before charges) and 1999 EPS of about $2.00. Analysts had expected EPS of $1.64 for this year and $2.44 for next year. In a conference call, CEO Al Dunlap said the earnings warnings became a self-fulfilling prophecy as retailers took the opportunity to negotiate low-margin deals. Revenues were also hurt by problems with a few new products, weak grill sales, and a recall that cost $0.02 a share. Dunlap said that the reason the company delayed releasing Q1 earnings was that it wanted to simultaneously present its new restructuring plan. "Chainsaw Al" unveiled cost-cutting measures of roughly $250 million per annum that include closing and consolidating certain facilities and cutting 6,400 jobs. By the third quarter, Sunbeam also plans to divest three non-core businesses -- the East Pak backpack division and the compressor and hot tub businesses.
Genome technology company Incyte Pharmaceuticals <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: INCY)") else Response.Write("(Nasdaq: INCY)") end if %> sank $6 15/32 to $33 21/32 on news that Perkin-Elmer <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: PKN)") else Response.Write("(NYSE: PKN)") end if %> will start a new company with a top gene researcher to map human DNA. Perkin-Elmer, which gained $4 1/4 to $72 3/4, is teaming up with Craig Venter, president of the Institute for Genomic Research, to attempt to map the molecular sequence of human genome in just three years. That would outpace the government's Human Genome Project, which is slated to be finished by 2005. Though exciting from a scientific point of view, the new venture (80% owned by Perkin-Elmer) plans to sell genetic data to drug makers, which is bad news for Incyte, whose sales of DNA information to pharmaceutical companies have boosted its stock price by 45% in the past year. Perkin-Elmer formerly supplied much of the DNA sequencing equipment to Incyte, as well as Human Genome Sciences <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: HGSI)") else Response.Write("(Nasdaq: HGSI)") end if %> and Millennium Pharmaceuticals <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MLNM)") else Response.Write("(Nasdaq: MLNM)") end if %>.
QUICK CUTS: Internet content aggregator Excite Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: XCIT)") else Response.Write("(Nasdaq: XCIT)") end if %> fell $5 1/2 to $58 1/2 after BT Alex. Brown lowered its rating on the company to "buy" from "strong buy" on concern over the company's ability to execute an aggressive business plan and integrate recent acquisitions... Excite's fall also dragged down its competitors: Lycos Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: LCOS)") else Response.Write("(Nasdaq: LCOS)") end if %> dropped $3 27/32 to $58 3/32; Yahoo! Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: YHOO)") else Response.Write("(Nasdaq: YHOO)") end if %> dipped $3 9/16 to $114 3/16; Infoseek Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SEEK)") else Response.Write("(Nasdaq: SEEK)") end if %> slipped $1 1/8 to $30 1/2; and Internet portal and service provider America Online <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AOL)") else Response.Write("(NYSE: AOL)") end if %> lost $3 1/2 to $86 5/8... Biopharmaceutical company Texas Biotechnology <% if gsSubBrand = "aolsnapshot" then Response.Write("(AMEX: TXB)") else Response.Write("(AMEX: TXB)") end if %> sank $4 1/4, or 47%, to $4 3/4 after announcing it has received a non-approval letter from the FDA for its anti-coagulant Novastan.
Fannie Mae <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: FNM)") else Response.Write("(NYSE: FNM)") end if %>, which buys up mortgages and resells them in bundles as securities, shed $1 5/16 to $57 3/34 after The Wall Street Journal reported that Congress may vote to allow the Department of Housing and Urban Development to raise the ceiling on the mortgages it insures, thus cutting into Fannie Mae's turf. Competitor Freddie Mac <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: FRE)") else Response.Write("(NYSE: FRE)") end if %> also lost $1 to $44... Ballard Power Systems <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: BLDPF)") else Response.Write("(Nasdaq: BLDPF)") end if %> fell $3 1/8 to $114 after Barron's reported that the exclusive supplier of fuel cells to a global alliance led by Daimler-Benz could be hurt by the Daimler-Chrysler merger... Software maker Adobe Systems <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ADBE)") else Response.Write("(Nasdaq: ADBE)") end if %> dropped $3 3/8 to $47 1/4 on concern that soft sales in Japan and a lack of new products will hurt Q2 revenues.
Vitamin and nutritional supplement manufacturer NBTY Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: NBTY)") else Response.Write("(Nasdaq: NBTY)") end if %> slipped $7/8 to $17 9/16 after announcing that it has filed a registration statement to offer 11.8 million shares in June... Biopharmaceutical company ImClone Systems <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: IMCL)") else Response.Write("(Nasdaq: IMCL)") end if %> dropped $2 3/8 to $10 7/8 on profit-taking after its sharp run-up last week... Medical supply distributor PSS World Medical <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PSSI)") else Response.Write("(Nasdaq: PSSI)") end if %> plummeted $4 15/16 to $14 7/16 after announcing after Friday's close that it will adjust earnings to accelerate the integration of Gulf South Medical Supply and that it expects to miss analysts' EPS estimate by $0.04 for 1998 (year ended April 3). For 1999, it expects EPS will fall 14% short of expectations... Oil field services company Halliburton <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: HAL)") else Response.Write("(NYSE: HAL)") end if %> was drilled for $1 9/16 to $52 1/2 on news of Baker Hughes' <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BHI)") else Response.Write("(NYSE: BHI)") end if %> acquisition of Western Atlas <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: WAI)") else Response.Write("(NYSE: WAI)") end if %>, which thwarts a bid from Halliburton. Baker Hughes was down $2 5/16 to $38 13/16.
Teva Pharmaceutical Industries <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TEVIY)") else Response.Write("(Nasdaq: TEVIY)") end if %> shed $3 1/4 to $43 after reporting Q1 EPS of $0.41 per American depositary receipt, compared with $0.51 a year ago. Analysts had expected $0.45. The drug company also said it is in negotiations to acquire, for cash, a European pharmaceutical company with annual sales of approximately $100 million... Independent energy company Belco Oil & Gas <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BOG)") else Response.Write("(NYSE: BOG)") end if %> tanked $2 5/16 to $13 7/8 after reporting Q1 EPS of $0.06 (before charges; $1.90 oer share loss after charges), compared with $0.38 for the year-earlier period, and announcing postponement of Gulf Coast drilling. Goldman Sachs downgraded the company to "market underperform" from "market outperform."
TII Industries (Nasdaq NMS: TIII), which makes surge protectors and fiber optic products, fell $1 1/8 to $4 7/8 after reporting a Q3 loss of $0.16 a share versus a loss of $0.31 a year ago. The single analyst's estimate listed in First Call was for earnings of $0.04 a share... Virgin Express Holdings <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: VIRGY)") else Response.Write("(Nasdaq: VIRGY)") end if %> dipped $2 to $20 after the Belgium-based airline reported a Q1 loss of $0.26 per American depositary share compared with a loss of $0.25 for the prior-year period. The single analyst's estimate listed in First Call was a loss of $0.10 per ADS.
FOOL
ON THE HILL
An Investment Opinion
by
Jim Surowiecki
Monsanto Growing
Sometimes the rumor mill grinds exactly right. Last week, the stock price of seed company DeKalb Genetics Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DKB)") else Response.Write("(NYSE: DKB)") end if %> began to rise on takeover talk. Speculation on the Street was that Monsanto Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MTC)") else Response.Write("(NYSE: MTC)") end if %>, which already owned 40% of DeKalb, was ready to acquire all the remaining shares. This morning that speculation became reality, as Monsanto announced that it would be making a $100-per-share all-cash offer for DeKalb. The price represented a hefty $24 premium to DeKalb's Friday closing price, and immediately sent shares in the company skyrocketing to a level just below the tender price.
More surprisingly, Monsanto coupled that announcement with news of a stock-swap acquisition of seed company Delta & Pine Land <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DLP)") else Response.Write("(NYSE: DLP)") end if %>, news that probably came as something of a shock to Delta & Pine shareholders, who suddenly found their shares valued at 5% less than Friday's close. Delta & Pine shareholders will get 0.8625 Monsanto shares for each Delta & Pine share, and at Monsanto's current price around $55 that works out to an offer of a little less than $50 a share, making this a proverbial take-under. Of course, if the market continues to drive Monsanto shares higher on all the good news, then Delta & Pine shareholders could reap the benefits.
The DeKalb acquisition was expected because the two companies make such an excellent fit. As the #2 seed company in the U.S., DeKalb is one of the key players in the burgeoning field of agricultural genetics, and has devised seed corns that are specifically resistant to Monsanto products, including a corn that can tolerate the insect protectant YieldGard and a corn that is resistant to the herbicide Roundup, which is one of Monsanto's real cash cows, generating two-fifths of the company's earnings.
Delta & Pine, on the other hand, is a much less dazzling company than DeKalb, in the sense that it's essentially a large-scale distributor of cotton seed. At the same time, Delta & Pine has played an important role in getting market penetration for Monsanto's Bollgard and Ingard cotton seeds, which are genetically designed to be insect-resistant, and for Roundup Ready cotton, which is exactly what its name implies. Also, like DeKalb, Delta & Pine has a strong international presence, which will become more important in the future as Monsanto attempts to bring the biotech revolution in plant growing to parts of the world that remain rather skeptical of the virtues of agricultural genetics.
Together, the two acquisitions represent a big step forward in Monsanto's ongoing and dramatic transformation of itself from an old-line chemical company into a biotech giant. In the short term, Monsanto has figured out -- as the examples of Roundup Ready cotton and corn suggest -- how to play both sides of the field, marketing both herbicides and herbicide-resistant seed, as well as insect protectant and insect-protectant seed. In the long term, it is making the kinds of investments in genetic seed technology that could fundamentally alter the economics of agriculture.
The company's strategy centers around the concept of sustainable development, which for Monsanto means that it will create genetically engineered crops to feed the world's population while simultaneously using information technology to reduce waste and maximize productivity. Higher yields per crop will reduce the amount of arable land needed for agriculture, while pest- and disease-resistant crops can reduce and possibly eventually eliminate the need for pesticides, by which time Monsanto will presumably have figured out a way to do without sales of Roundup.
Needless to say, any time you start messing with genetically altered crops, you run the risk of scaring people, and Monsanto has faced a major backlash against its seeds in Europe and against its milk-producing hormone in the U.S., and serious questions have been raised about the possible effects of pest adaptation to the new crops. But the economic principle behind Monsanto's drive into biotech is inarguable: the supply of land isn't increasing, but the amount of food we need is, so innovations that allow us to get more from less will be difficult to turn down.
In the short term, the transformation of the company has meant that earnings have taken a hit, although the company is growing revenues on a sequential basis. In its most recent quarter, for example, Monsanto's earnings dropped by two cents per share on a year-over-year basis, while economic value added (EVA), which takes into account cost of capital, dropped by nearly 25%. On the other hand, the entire earnings decline came from the company's non-agricultural divisions, while its agricultural division saw earnings rise by nearly 60% and steep growth in revenues as well. More impressively, Monsanto brought home $0.32 a share despite increasing what it calls "growth spending" -- which includes R&D and infrastructure expansion -- by 65%. The company's seeds are now used on almost 50 million acres worldwide. That's still a small number, of course, but it's large enough that the success of genetically altered seeds will gain real public visibility, which in turn could propel rapid growth.
Monsanto's stock is currently trading at what looks like a very steep P/E of 86, but that number is seriously skewed by the company's previous two quarters, which were essentially its turnaround quarters. Based on the first quarter of FY 1998, it now has a run rate of $1.28 a share (not counting today's announced acquisitions), and estimates are for better than that. More importantly, this is one of the few companies that can genuinely be described as already doing business in the next century. Monsanto now offers the revenue base and name of a blue chip with the technological pizzazz of a start-up. Today's acquisitions should only make it stronger.
Please see the Motley Fool's Conference Calls page for call information and links to synopses.
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