E.I. du Pont de Nemours & Company (DD)

DuPont has many projects under development with significant long-term market potential. Examples include second-generation biofuels and bio-plastics. The company's applied biosciences division aims to provide products for agricultural energy crops, feedstock processing, and advanced biofuels. The division has entered into joint ventures with Danisco (DCO-KO) and BP (BP) to commercialize ethanol and biobutanol.

The launch of Optimum GAT herbicide resistance gene in soybeans and corn in 2009-2012 will contribute to increased profitability within the company's Pioneer seed segment.

Despite the 61% decline in net income Dupont posted for the second quarter of 2009, the company is weathering its tough economic environment rather well, beating analyst expectations of 53 cent EPS on average. Its stock price already reflects the weak environment, and I have faith in management's ability to deliver on its EPS guidance of $1.70 to $2.10 per share, which should increase stock value in the coming year. Management has cut costs of about $1 billion this year, with $600 million accounted for so far, including the 4500-employee layoff.

It is important to note that the company's 2009 performance outlook is based on global auto bills of 58 million vehicles and 55,000 US housing starts.

Analysts predict that emerging economies will represent 70-80% of future growth in the Titanium Dioxide industry. Although the industry and economy are struggling as a whole, DuPont is in a position to recover quickly. For one, DuPont saw improvement across the board in financial metrics in the first half of 2009 compared to the first half of 2008, due to factors such as a 28% reduction in working capital and a 15% reduction in plant fixed costs. Secondly, DuPont conducts 75% of its business outside of North America, a far cry form 20 years ago, when it was selling 60% of its product in North America.

As a result, analysts predict that DuPont is in a great position to take advantage of emerging economies in the future, making it an attractive stock to buy while costs remain low.

Increased demand for corn by ethanol refineries pushed corn prices to record highs in 2008. DuPont's genetically modified seeds allow farmers to grow more corn in a given acreage of land. The average yield of corn in the US is 150 bushels per acre, but DuPont aims to push the yield to 400. US farmers increased corn plantings 19% in 2007. In addition, the percentage of genetically modified corn in the US has risen from 46% in 2004 to 61% in 2006, driving higher seed sales for Pioneer, DuPont's seed company. Pioneer is investing 9-11% of its revenue on seed research to boost corn productivity.