On CNBC’s MAD MONEY tonight, Jim Cramer went over the agriculture sector. We recently noted ourselves about Ag-flation as wheat prices have more than doubled over the last year. Cramer noted that Cargill suspended plans for a new ethanol plant. Cramer says that this is going to create a sell-off, but it won’t mean the sector is dead and will create buying opportunities. He thinks the famine watch may end up with rationing to keep a lid on prices in a world where demand is rising rapidly. The possible famine and growing demand for food and crops for energy is driving these. After these stocks take a share price hit this week, he wants you to look at buying some of these that are still at the start of a multi-year trend as now our food supply is competing for energy. His favorite stocks right now in the sector are:
- Mosaic (NYSE: MOS) as a potash winner with major pricing power.
- Potash (NYSE: POT) as another potash winner with major pricing power.
- Agrium (NYSE: AGU) also in nutrients and fertilizers like Potash.
- Monsanto (NYSE: MON) as the biotech of Agriculture.
- Deere & Co. (NYSE: DE) for the machinery.
We would also note that if you are a true lover of agricultural trading, there is an ETF that tracks this sector called Market Vectors Global Agribusiness ETF (AMEX: MOO), which is up 50% since its launch just 6-months ago. You would also want to know that Four of his five top picks in that group above are in the top ten holdings in this ETF. There are many other Agriculture pieces here, and some are Cramer and some are not:
- Cramer very recently noted FMC Corp. as his hidden value agriculture trade.
- He also talked about Ag-flation before, although that isn’t as fresh.
- Here were the 2007 relevant comments into 2008 where Cramer said he sees Ag and Solar winning.
- You can also see his "wild bull market picks" in the sector from last year to see which he likes and walked away from.
- You can also see a pending hot IPO in the sector called INTREPID POTASH.
- We also featured Titan Machinery before it was added to the IBD 100 index.
Jon C. Ogg
February 26, 2008