Home » Caveat Emptor Perspective » Monsanto Nails it. Dividend Increase Maybe. Management Needs to Confirm Earnings $MON

Monsanto Nails it. Dividend Increase Maybe. Management Needs to Confirm Earnings $MON

Monsanto

Monsanto (Photo credit: arbyreed)

Monsanto (NYSE:MON) came out charging with an unexpected blockbuster quarter. US farmers flush with last years crop failure insurance money have bought premium seeds and setting themselves up for success this summer.

Pity the investor who did not buy this stock in Aug when it was around $70. You would look very astute with the current $98 per share. So here are the issues. Dividend yield at about 1.5%. If earnings are truly up then management needs to confirm with a dividend increase.

Money flow is mildly negative at 0.92. Short interest has recently risen by 7% but is still only a snick over the 1% of public float mark. Shorts have to be covered. Increasing the dividend makes short positions more expensive. Managements usually hate short positions.

So we need a dividen hike or the market starts to belive management does not believe their own words. In that case the shorts take over.

George Gutowski writes from a caveat emptor perspective. Follow him on twitter@financialskepti or his evil twin who is writing a Wall Street Murder Thriller twitter@georgegutowski .

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