by Heide Malhotra
September 22, 2013
signs during a protest against
Monsanto in Los Angeles on May 25.
Marches and rallies
modified organisms (GMO)
have been on the rise
Company insiders and institutional investors alike have been dumping
the Monsanto Company in recent
While consumers have concerns with Monsanto’s business due to its
genetically modified organism (GMO)
products, investors are worried about its business practices and
“People increasingly don’t like
Monsanto, and that’s a direct result of all the growing
realizations about the dangers of GMOs, [and] Monsanto’s
predatory business practices,” said Mike Adams, editor of
For its 2013 fiscal third quarter the St. Louis-based Monsanto
reported better than expected earnings due to Latin American corn
business and seeds business in the United States.
Net sales were at $4.3 billion, up by 1 percent from the 2012 third
quarter. Net income for the quarter decreased by 3 percent and
operating expenses increased because of a 5 percent increase in
research and development Costs.
On the positive side, Monsanto reports that the demand for the
company’s products has increased, but it is lacking acreage to meet
The company’s stock was somehow volatile during the
year, trading both above and below $100 per share in 2013.
However, over the last three months it
has gained 2.5 percent, trailing the benchmark S&P 500 Index which
had increased 7.7 percent during the same period.
A significant number of Monsanto shares, including insider shares,
were traded, with 198,550 shares being traded over the last three
months and 1.3 million during the past year.
However, only 22,023 shares were bought
while 176,527 were sold during the past three months. Over the past
year, 1.1 million shares were sold, while only 207,305 shares were
Nasdaq disclosed that 19 officers sold the company’s shares during
the past three months and 59 company insiders disposed of 128 shares
over the past year.
All insider trading were from execution
of options. The officers held shares at a fixed price and sold the
shares at the market price, making substantial profits. In the stock
market, the holder of an option may sell a certain amount of
securities at a given price and at a given time.
The stock transaction happens on
completion and not when the option is distributed.
“Over the last half-year time
period, Monsanto Company has seen zero unique insiders
purchasing, and 10 insider sales,” according to Insider Monkey,
a website which tracks insider activity.
One of the major Monsanto insider
sellers was Hugh Grant, Chairman and CEO.
He sold a total of 487,420 shares
between January 2012 and July 2013, profiting greatly by exercising
Unload Monsanto Stock
Besides officers of Monsanto, some funds have distanced themselves
from the company ahead of the third quarter investor reporting,
given the recent negative coverage of
GMO foods and their health risks.
The number of hedge funds holding long positions decreased 6 percent
during the second quarter, with 59 funds retaining their investments
in Monsanto, according to Insider Monkey.
According to Natural News, Vinik Asset Management and Point State
Capital reduced their positions in Monsanto by a combined total of
about $156 million.
A few analysts recommend that investors, especially hedge funds,
reduce their exposure to Monsanto, as well as to funds that hold a
significant number of stocks in the company, such as Lone Pine
Capital and Blue Ridge Capital.