The Next Top Ag Plays

Watch LNN and TCK

By Bryan Bottarelli
Monday, March 03, 2008 11:36 AM EST
Mon, 3 Mar 2008 16:36:00 GMT

Dear Bottarelli Research Member,

While we continue to watch the major market averages for signs of stabilization, let’s take a quick look at the red-hot agriculture sector.

As you know, economies in China and India are demanding U.S. farm exports like never before. And as a result of this demand, prices for everything related to growing, planting, and distributing agriculture products is increasing. For example, while corn, wheat, and soybeans are increasing in price, so are the costs of seeds, fertilizer and other supplies.

That’s why Monsanto (MON – NYSE) has been one of the best agriculture stocks on Wall Street. They provide seeds that are genetically modified to increase agricultural productivity, and as you can see from the chart below, shares have been following the 50-day moving average higher over the past 5 months. Right now, MON is about to re-test this level once again, and this could be another strong upside call buying opportunity.

MON

In addition to MON, there are a handful of other powerful agriculture companies that we’ve successfully played over the past year. Names like Potash of Saskatchewan (POT – NYSE), Agrium (AGU – NYSE), John Deere (DE – NYSE), and Mosaic (MOS – NYSE) all make this list, and we’ll continue playing all of them when the correct market timing signals take shape. But unlike last year, Wall Street has now caught onto the incredible upside advances of most of these companies. So what I’ve done today is conducted a search for those companies that could extend upon this powerful agriculture trend — but are not yet discovered by Wall Street. By learning about these stocks now, we can once again stay one step ahead of the mainstream investing public.

One company, for example, is Lindsay Corporation (LNN – NYSE). LNN manufactures and sells automated agricultural irrigation systems that enhance or stabilize crop production while conserving water, energy, and labor. With growing season right around the corner, we may see LNN experience blockbuster sales here in 2008, so I’ll keep a sharp eye on LNN for an upside call buying opportunity.

LNN

Another little gem is Teck Cominco (TCK – NYSE).From an investing thesis,TCK is a wonderful combination of coal, metals and fertilizer. To be honest, you can’t get much better than those three sectors. You see, Teck Cominco produces zinc, copper, metallurgical coal, lead, and molybdenum. They also produce fertilizers and various specialty metals, offering investors like us exposure to three powerful market segments.

TCK

If shares pull back, this could be another great upside play. After all once Wall Street realizes that TCK offers exposure to metals, fertilizer, and coal, the stock could really receive some major upside momentum. As always, I’ll alert you when it’s time to act. Until then…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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