Monsanto Company (MON)

In order to capture more of the Latin American market, Monsanto is decreasing its prices by 15-30% in Brazil and Argentina, dramatically lowering revenue for the next one or two financial years.

Question: what do corn and real estate have in common?

Answer: they both grew rapidly and now they're both going to burst. (Or in the case of housing, have already burst.)

Face the facts: corn ethanol is not the most efficient of the alternative fuels now in development. It's not emission-free, it requires the planting of massive quantities of a specific crop (when all that acreage could be going to export fruit or rare vegetables or something), and until recently ethanol production was so energy-inefficient that it caused a net loss of energy! Scientists know that corn ethanol is not the clear and simple answer. It's just the temporary feel-good government-sponsored solution to the gasoline problem, and as soon as those subsidies dry up (which they are scheduled to, probably around the next five-ten years), corn ethanol is going to be overtaken by something newer, cleaner, and more efficient. Monsanto won't be ready when that day comes, because its corn pipeline is too strong and ethanol is too exciting right now for the company's management to invest nearly enough in other areas to compete with companies like DuPont.

Litigation and negative government regulation is an ever-prevalent threat for Monsanto. In addition to currently facing charges in the EU courts, Monsanto is fighting an uphill battle with Argentina for Roundup-Ready's patent protection. Monsanto's Roundup-Ready line is also under fire from several US environmental protection groups.

Lack of diversification in Monsanto's approach to the developing alternative fuels market means disaster if public support swings away from corn-based ethanol towards a different fuel. Monsanto would also suffer from a drop in the price of gasoline, since alternative fuels would lose importance.