The Zacks Analyst Blog Highlights: Eaton, Caterpillar, Potash, Monsanto and Deere

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Jul 26, 2011, 09:30 ET

CHICAGO, July 26, 2011 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Eaton (NYSE: ETN), Caterpillar (NYSE: CAT), Potash (NYSE: POT), Monsanto (NYSE: MON) and Deere (NYSE: DE).

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Here are highlights from Monday's Analyst Blog:

Dow to 20,000 by 2015 on Emerging Markets

In early June, I responded to James Altucher's crystal ball article on MarketWatch about "Dow 20K" with some fundamental substance to put underneath the prediction. I used Eaton (NYSE: ETN) as an example of an industrial beneficiary of Emerging Markets and a stock I had recommended buying at $40 last October.

"What's driving the stock market recovery -- as much as, if not more than, any extraordinary monetary policy -- is Emerging Markets. Global growth and demand from dozens of countries with emerging middle class populations that want the lifestyles of the West have kept the profits of companies like Caterpillar (NYSE: CAT) and Eaton brimming as infrastructure development in the BRICs and beyond merely hiccupped during the US banking crisis and then forged on."

Global industrial infrastructure demand aside, if you are going to build big new cities for people to live and work in, there's another area of development you better have figured out: food. Since early 2010, I've been writing about the next ten years being "the decade of food" because of the global dynamic that happens in planetary agricultural demands when 2 billion shift to a Western meat-based diet.

After I attended the World Agricultural Conference in Chicago in May, my awareness of the dynamics was greatly expanded. I was a buyer of the fertilizer, seed, and machinery companies prior to that -- like Potash (NYSE: POT), Monsanto (NYSE: MON), and Deere (NYSE: DE) -- and I only became more interested after hearing top AG economists and investors talk about the global food puzzle with a world headed toward 9 billion inhabitants by 2050.

The Decade of Food

One thing that stood out at that conference was the surge of Private Equity interest in this space. Here's what I wrote for TheStreet.com on May 10:

"The investible agribusiness universe is estimated to be between $600 billion and $2.2 trillion, depending on how you slice the criteria for inclusion (e.g., what percentage of a company's revenues come directly from ag-related activities). And much of the serious investing that's going on is being done through Private Equity (PE), not public companies.

Bill Goodbar, Managing Director of Agricapital Corporation, noted in his presentation that 63 new PE firms are looking to raise over $13 billion for new investments, both domestic and abroad. This money will pour into farming land, corporate farm development, infrastructure, transportation, chemicals, seeds, and biotechnology, water use and irrigation, machinery, processors, grocers, a dozen other logistical points in the supply chains."

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