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Monsanto: It's a keeper
YTD stock performance: -28%

The dominant force in the agricultural biotechnology industry must now know what a drought feels like for farmers.

Last December, Forbes named Monsanto the company of the year, and shortly after, everything started to go wrong for the agriculture firm.

In January, the Justice Department launched a formal investigation over antitrust issues. Since then, the company's all-star product, a patented herbicide-resistant seeds called Roundup Ready, became its own worst enemy.

The very weeds that Roundup Ready was created to kill developed a resistance to it and produced so-called super weeds. Farmers had to spray fields with other herbicides and resort to labor-intensive methods to get rid of the drug-resistant weeds.

Most recently, Monsanto saw its shares plunge after initial harvest data suggested that the company's new SmartStax corn seeds weren't performing as well as the company had anticipated. While it's too early to make a call on SmartStax's performance, a more recent test showed that the corn seeds are delivering the expected yields.

While the new data has helped ease doubts about SmartStax, Deutsche Bank analyst David Begleiter thinks there is a limited upside to the stock over the next six months.

But investing gurus Warren Buffett and George Soros appear to disagree. Both have added shares of Monsanto to their portfolios during the third quarter, according to SEC filings.



NEXT: Staples: It's a keeper
Last updated November 22 2010: 2:23 PM ET
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