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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Sergio H who wrote (44936)	10/12/2011 1:32:11 PM
From: E_K_S	Read Replies (1) \| Respond to of 78687

Thank you for the AG report Links. I am not too interested in the monthly variations but more so of the longer trend. The grains and oil seed harvests are areas that BG and SEB seem to be investing in so these would be of interest. My new tracking position in AG GROWTH INTERNATIONAL INC. (Toronto: AFN.TO ) make a lot of the grain storage bins and conveyor systems (even those that load ships). They recently reported lots of growth in Russia and Australia too. I provided a link to their most recent June 2011 presentation in my earlier post. The interesting thing with BG is they have a JV with Solazyme, Inc. (SZYM) to process several variants of high valued oils from their oil seed milling facility in Brazil. Therefore, their productivity boost does not come from higher productions but rather from more efficient processing technologies. As a result, earnings are higher based on selling these higher margin oil variants from their new facility. Therefore, my value AG theme premise is not so much on "higher productions" but rather reducing costs (through more efficient equipment & systems) and integrating sustainable practices (like SEB has done w/ their bio-diesel plant in Colorado that uses the waste output from their HOG farm) to better use the inputs now used in production. Noble Group Ltd. (NOBGF.PK) has a sugar processing facility in Brazil that they recently expanded at a cost of $900M. This is the first facility to take the "waste stream" biomass of the plant to power generators that produce electricity sold to the local utility. All areas of their facility are profitable and sustainable. So the Value opportunity is in the process engineering that goes into building these next generation facilities. I have also created a new watch list titled "Processed Engineering" Companies that develop and engineer these systems. This would include utilizing new materials (ie catalysts) and technologies that make the sector/industry more efficient. The companies in my value list for this group (processed engineering) include: Dow Chemical Company (The) Comm(NYSE: DOW), Cabot Corporation Common Stock(NYSE: CBT) and OM Group, Inc. Common Stock(NYSE: OMG). finance.yahoo.com There are many other companies that I need to add to my list and cover several other sectors but are developing and/or engineering better and more efficient solutions to old problems. These systems can be installed all over the world (especially in China and Brazil). Most of the technologies are developed in the US and exported to countries around the world. EKS

To: Sergio H who wrote (44936)	10/14/2011 1:24:43 PM
From: E_K_S	1 Recommendation Read Replies (1) \| Respond to of 78687

Dow Chemical Company (The) Comm(NYSE: DOW) E.I. du Pont de Nemours and Com(NYSE: DD) finance.yahoo.com Greater China Oct 8, 2011 China ploughs a new corn furrow atimes.com From the article:"...China's Ministry of Agriculture has floated the idea that its moratorium on commercial use of genetically modified (GM) seed would continue - with the exception of corn. ...". <snip> "...It is no coincidence that the biggest players in genetically modified seed are also the world's biggest producers of herbicides: *Monsanto, DuPont (which purchased the venerable hybrid corn outfit Pioneer), and Dow...."* ...A milestone of sorts was reached with the release of "Genuity Smartstax", a Monsanto/Dow joint effort that piled on six varieties of Bt expression with two additional herbicide tolerance traits on top for good measure. ..." <snip> "...Pioneer, a subsidiary of DuPont, has achieved some remarkable results in yield with its Xianyu 335 hybrid corn variety. Development of the variety began in China in 2000, the seed - produced by two local partners of Pioneer inside China - came on the market in 2005, and sales exploded in 2008-2009. XY335 is now the second-most popular hybrid corn seed in China, with over 40 million hectares under cultivation...." -------------------------------------------------------------------------------------------------------------------------------------------------------------------- This would be a big deal if China allows GM corn. I am not sure that DOW's "Genuity Smartstax" herbicide is the best approach for efficient "sustainable" production but their GM corn seed and herbicide (w/ Bt expression) significantly increases production. With both companies priced at a PE of 12, they make my initial value screen. I would prefer a more sustainable "technology" solution but I think w/ all the recent concerns, the industry is taking a more conservative approach in developing integrated farming solutions. The herbicides now used are so much more environmentally friendly than those used 20 years ago. The issues now are due to genetic resistance leading to applications not as effective on weeds. However, the herbicides now breakdown in days (not years like DDT) and become inert in soils. EKS