Seeking Alpha: Chr Hansen Is A Rare Story In The Food Sector

On the whole, established companies in the food and beverage space don't typically grow their revenue at more than a low-to-mid single digit clip over the long term. But then, those companies aren't Denmark's CHR Hansen (OTCPK:CHYHY) and aren't leveraged to strong underlying trends in consumer preferences, as well as R&D-driven edges in customer costs and efficiency.

Not unlike Novozymes (OTCPK:NVZMY), CHR Hansen has almost everything I like to see in a company except for an attractive valuation. I do believe that the company has meaningful opportunities to leverage growth opportunities in dairy consumption, probiotics, natural colors, and agriculture, but the stock's valuation already reflects what I believe are generous assumptions regarding growth and the quality of the company.

I'd certainly monitor CHR Hansen in the hope of buying on a market freak-out (whether company-specific or across the market), but the shares today seem priced more for those who are comfortable buying growth almost irrespective of value.

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Chr Hansen Is A Rare Story In The Food Sector

Seeking Alpha: Novozymes And The High Cost Of Greatness

When I first started the process of refreshing and updating my research on Danish enzyme specialist Novozymes (OTCPK:NVZMY), I was really hoping that the end result would be an undervalued and appealing investment opportunity. This is a company that I like a lot and a stock that I want to like. Now, readers can carp about whether wanting to like a company pollutes the research/analysis process, but I see no reason to hide the fact that I think Novozymes is a well-run company with a strong leadership position in a sizable but growing industry.

Valuation is the issue. I realize that investors should expect to pay up for quality, and Novozymes's nearly 50% market share in the industry and strong history of ROIC generation are certainly marks of quality, but I'm not comfortable with the sort of growth/certainty that appears to be factored into the valuation today. Investors less sensitive to valuation may find more to like here (particularly after the 20% decline from the 52-week high), as this is the sort of situation where price is really my only major hang-up.

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Novozymes And The High Cost Of Greatness

Seeking Alpha: Lonza Targeting Significant Internal Improvements

Back in December I thought biopharma manufacturing and specialty chemical company Lonza (OTCPK:LZAGY) looked like a "middling" investment opportunity on the basis of a rich valuation and so-so organic growth prospects. Since then, the shares are up about 25% as investor interest in immuno-oncology has swelled, free cash flow generation has improved faster than expected, and management has laid out ambitious targets for profit growth and returns. I'm reluctant to call Lonza an uninspiring pick again, particularly as pharmaceutical manufacturers often get generous valuations, but the valuation does seem to factor in good progress on management's goals.

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Lonza Targeting Significant Internal Improvements

The Motley Fool: Monsanto Company's Pipeline Is The Real Draw Today

Agribiotech Monsanto (NYSE: MON  ) is always going to be a lightning rod for criticism and scrutiny -- well, more so than other seed trait and chemical companies like DuPont (NYSE: DD  ) , Syngenta (NYSE: SYT  ) , and Dow Chemical (NYSE: DOW  ) . Even so, the company's significant sustained yield advantages and its deep, expanding pipeline make it a company and a stock well worth watching. Should the company's more recent efforts in RNA interference, integrated farming planning/management, and biologicals pay off, there could appealing upside to today's price.

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Monsanto Company's Pipeline Is The Real Draw Today

Investopedia: Solazyme May Pay Off On Green Dreams

As embarrassingly high-profile green company bankruptcies, in recent weeks, have reminded investors that governments may be poor at picking long-term winners, it is also worth repeating that it's not easy being green. Conventional methods of producing energy are cheap, easy and reliable, and those are high hurdles for new technologies to surmount. Nevertheless, while there is ample uncertainty left, Solazyme (NASDAQ: SZYM) is a green-tech company with technology well-worth a look from aggressive investors.   


Quarterly Results are Trivial 
In the larger scheme of things, Solazyme's quarterly earnings reports don't matter much right now because, frankly, there are no earnings. Solazyme did announce that revenue rose 93% from last year, but with total revenue still below $9 million, it's not all that significant. Likewise the GAAP net loss of $14 million is not so significant.


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Investopedia: DuPont - From Gunpowder To Plastics To Yogurt

If a company is going to hang around for a couple of centuries, it is a good bet that it will have to change and adapt with the times. DuPont (NYSE:DD) is an excellent case in point - while grouped into the generally stodgy, boring, and cyclical "chemicals" industry group, DuPont has a rather remarkable record of remaking itself and getting involved in new growth markets. Though DuPont's record of diversification is not flawless, investors should at least be willing to give management the benefit of the doubt with this latest acquisition. 

3D - DuPont's Danisco Deal
DuPont announced Monday morning that it would acquire Danish ingredient and enzyme company Danisco for $5.8 billion in cash and the assumption of an additional $500 million of Danisco's debt. The deal gives a better than 25% premium to Danisco shareholders and will likely produce more than 10% earnings dilution for DuPont in the first year.

As has already been widely reported, this is an unusually large deal for DuPont - the largest deal the company has done since it acquired Pioneer for nearly $8 billion more than a decade ago. That deal, though, has proven to be an exceptionally good move in hindsight, as DuPont is now one of the leading advanced seed trait companies in the world. (For related reading, see 2010's Highest Performing DJIA Stocks.)

Some New, Some Old
About two-thirds of Danisco's revenue comes from products for the food industry - an industry that DuPont has heretofore not been much of a focus for the company. In addition to a sweeteners business that competes with the likes of Tate and Lyle (Nasdaq:TATYY), Danisco sells a host of so-called "enablers" that include emulsifiers, stabilizers, flavor enhancers, and so on. In more practical terms, when you buy a bottle of salad dressing and it stays shelf-stable for weeks, that is because of the kinds of products Danisco produces.

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One Small Step For Amyris

Exciting stories are usually built with a lot of boring announcements. To that end, Amyris's (Nasdaq:AMRS) recent announcement that it had finalized a joint venture with Brazil's Cosan (NYSE:CZZ) is not surprising or exciting, but it is a good example of the blocking-and-tackling type of announcements that will go into making the Amyris story and business model work over time. 

A Deal That Works For Both Sides
Amyris and Cosan will work together to produce and sell various so-called base oils that will be made with the farnesene that Amyris will produce in other facilities. It is a pretty typical win-win type of deal. Amyris needs to find as many customers as possible for its farnesene, while Cosan needs diversification away from ethanol as an end product of Brazil's prodigious sugarcane production. (For more, see Brazilian Stocks To Watch In 2011.)

Just One Brick In The Road
Ultimately, the success of this Amyris-Cosan venture in base oils is not critical to the overall success of Amyris, but it highlights what I think is an important part of the Amyris business model - working with other companies and finding as many potential markets for its products as possible. Where many failed ethanol companies like VeraSun and Aventine went wrong was in being just another commodity producer, but one that relied upon other commodity feedstocks (corn, notably) and government subsidies. In other words, they were refiners with pretty much one product to offer.

In contrast, Amyris has found a lot of potential uses for its genetically-modified yeast. The first key product will be farnesene, which can be used in a wide range of products including diesel and jet fuel additives, lubricants, detergents and flavors and fragrances. As time goes on, and the company's yields improve, it may be possible to produce a much wider range of products including fuels themselves, plastics and synthetic rubber. (For more, see Back To The Future With Ethanol.)  

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