Cramer Stays High on Agriculture (MON, POT, AGU, DE, MOS, MOO)

February 26, 2008 by Douglas A. McIntyre

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:

Jon C. Ogg
February 26, 2008