I'll Try the Portfolio Salad with Oil & Vinegar, Please!

Michael is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

Sometimes all it takes is something crisp and refreshing like a salad - with just enough tanginess - to liven up a dreary lunch. The same can be true for a stock portfolio that seems bland and uninspiring. A little oil & vinegar over fresh greens may be just the enticing side dish you need to augment your investments.

An agricultural enterprise, Monsanto Company (NYSE: MON), with their subsidiaries, provides agricultural products for farmers. The company operates in two segments: Seeds and Genomics, and Agricultural Productivity.

In January, Monsanto reported results for the first quarter of their fiscal year 2013. Net sales increased 21 percent over the prior year's first quarter to $2.9 billion. Gross profit for the first quarter of 2013 increased 27 percent over the year ago period to $1.4 billion.

Net Sales for their Seeds and Genomics segment (global seeds and related traits business) increased 14 percent in the first quarter to $1.8 billion. Net Sales for Monsanto's Agricultural Productivity segment (crop protection products, lawn-and-garden herbicide products) increased $279 million.

What does this mean for investors? Investors should note that Monsanto reported that continued expansion of their Latin American corn business, early momentum in their U.S. seeds and traits business, and performance of their agricultural productivity segment drove these robust results. The company, due to a positive order book, had strong shipments in the U.S.  Monsanto's order pace is ahead of where it was the same point in time last year.

A company's capacity for progressive development is something for investors to look at. Monsanto's sales are sprouting quite aggressively this new fiscal year. In addition, the company's commitment to R&D is something positive for investors to consider. Mr. Hugh Grant, Monsanto Chairman and CEO, stated, "The momentum in our business is also seen in our record research and development progress."

Monsanto announced at the end of January that they purchased select assets of Agradis, Inc. Agradis is a privately held company concentrating on developing sustainable agricultural solutions. Monsanto's purchase includes the Agradis name and their collection of microbes that can improve crop productivity. Moreover, Monsanto acquired the company's R&D site in La Jolla, California.

Of further note to investors: Monsanto's Board of Directors recently declared a quarterly dividend on the company's common stock of 37.5 cents per share (payable on April 26, 2013, to shareowners of record on April 5, 2013).

One way to accentuate this portfolio salad is with oil & vinegar dressing. Palette favorites to consider include H. J. Heinz Company (NYSE: HNZ) and The J. M. Smucker Company (NYSE: SJM).

Heinz , in tandem with their subsidiaries, manufactures and markets food products for consumers, and foodservice and institutional customers. The company's Heinz Ketchup, Distilled White and Apple Cider Vinegars, and other well-known products are the types of items consumers grab almost without thinking.

Significant for investors is Heinz's reported fiscal 2013 Q2 results. The company experienced growth of 11.1 percent in earnings per share from continuing operations (excluding charges for productivity initiatives in fiscal 2012). Strong growth in emerging markets, continued growth in Global Ketchup and their Top 15 Brands, and a favorable tax rate propelled this growth. Their Top 15 Brands delivered organic sales growth of 4.6 percent (+1.7 percent reported). Heinz delivered their 30th consecutive quarter of organic sales growth.

What these results facilitated is of particular interest for investors. This growth is making it possible for the company to increase investments substantially in marketing and worldwide capabilities. This is their down payment on future growth. Conservative investors (like me) often consider this management foresight and business acumen from solid corporations. Aggressive and innovative marketing on a global basis is a foundation for possible future strong returns for investors.

A stock that could mix well with that Heinz Vinegar is The J. M. Smucker Company. J.M. Smucker manufactures and markets branded food products including their popular line of Crisco Oils. In mid-November 2012, the company announced results for the second quarter ended Oct. 31, 2012, of their 2013 fiscal year.

Net sales increased 8 percent in the second quarter of 2013, compared to the second quarter of 2012. This was because of the impact of the acquired Sara Lee foodservice business and a favorable sales mix. For fiscal 2013, the company expects net sales to increase approximately 7 percent compared to 2012. This includes an incremental eight-month contribution from the Sara Lee foodservice business.   

I like the confidence the company has in their product family. Confidence, based on storied products, business fundamentals and strong management, is a valued intangible since 2008.

Mr. Richard Smucker, Chief Executive Officer, commented in November, "We delivered another strong quarter of solid sales and earnings growth. Our long-term strategy continues to serve us well in consistently delivering results. Our iconic brands are trusted and have demonstrated their strength and resilience."

Mmmm… trust, strength and resilience from iconic brands… that's so 1950's and 60's. Nevertheless, it's something to consider as I chow down on that salad. I now have before me three ingredients I consider quite reliable in comparison to a lot of other offerings on the market today. 


MichaelONTARIO has no position in any stocks mentioned. The Motley Fool recommends H.J. Heinz Company. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!

blog comments powered by Disqus