Stockchase Opinions

John Hood Direxion Moonshot Innovators ETF MOON-N COMMENT May 06, 2011

Global Agriculture ETF (COW) or Agribusinesses ETF (MOO) or is there something with better momentum? He could care less about momentum but does prefer the COW, simply because it is in Cdn $s..
$54.360

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BUY
Agricultural ETF's, Moo (MOO-N), Cow (COW-T) or Soil (SOIL-N)? Soil is new and is a package of fertilizer stocks. Agriculture stocks tend to bottom around the beginning of August and tend to move higher until around the end of December. Fertilizer stocks tend to lead agriculture stocks and usually start the end of June. Anyone of them are good. (See Top Picks.).
COMMENT
Not a fan of ETFs. He feels that with these you get the good, the bad and the ugly. Prefers Potash (POT-T) has not participated in the rally. Also likes Agrium (AGU-T). A good buy in the US would be Archer Daniels Midland (ADM-N).
COMMENT
Market Vectors Agribusinesses (MOO-N) or Agriculture Commodities (ZCA-T)? This one tracks stocks while ZCA is based on agriculture commodities such as wheat, cocoa, corn, etc. Loves the agriculture area and would prefer this one.
COMMENT

Has been a tough hold for the last 5 years. Has done nothing, but go sideways. Had a lot of issues with the big potash cartel. Thinks the story got too heavily promoted. This is something you have to put away for a long time. Doesn’t see any catalyst right now to move this up.

BUY

MOO-N and COW-T have come down. He is in accumulation mode on both. Great long term sectors to hold. Not bad timing here.

TOP PICK

He chose the US agriculture because you can take advantage that the Cdn$ is going to be coming down. Seasonally this goes from about the end of September right through until the beginning of January. Technicals also look very encouraging. This is currently in an upward trend and is outperforming the market. It is doing well because we are finally seeing grain prices move higher, which means more money in the jeans of the farmers, which they can spend on fertilizers and equipment.

PAST TOP PICK

(A Top Pick Nov 7/16. Up 8.72%.) Seasonality on this is around the beginning of October right through until the middle of February. Watch for the securities to start to underperform, and then take your profits.

WATCH
MOO-N is some of the grains and meats and is an overall agricultural play.
BUY

Agriculture is one of the big themes he's pursuing. He's been using MOO, which has been making relative strength new highs. Agriculture has recently been breaking out to new highs.

BUY ON WEAKNESS
Agricultural ETFs are sort of a hedge against inflation. It is a pressure on input for foods and there could be some margin pressures. The returns of the two ETFs could be due to which index it is pegged to. One might have more producers while one might have more exposure to agricultural machinery. You have to see what is in the ETF. Not a pure hedge for inflation but it is a lower correlated sector.