E.I. du Pont de Nemours & Company (DD)

AndyShea (98.69) Submitted: 11/13/07 12:02 PM : Start Price: $45.07 DD Score: 10.46

There are three reasons why I think DuPont is an attractive investment:

1. Considerable foreign sales exposure, making the company a principal benefactor of a weak U.S. dollar.

2. Majority stake in Solae, LLC, a joint venture that manufactures soy-based food ingredients with $1.2 billion in annual revenue. As dairy prices rise (or stay elevated), soy protein's value proposition materially improves. Same goes for soy-based polymers as crude oil remains expensive.

3. Strong annual dividend.

Assuming the dollar remains depressed, the dairy protein market remains expensive and the dividend stays constant (if not increased), this stock should deliver a nice return as crude oil prices come down and the U.S. housing sector recovers. So far, DuPont has managed to pass higher input costs through to their customers (in the form of double-digit price increases).

I also like their diversified biofuels and biomaterials strategy. Even if ethanol prices collapse, the company should see nice growth in its biomaterials sector.

Finally, I'm optimistic that DuPont's Pioneer subsidiary will do a better job of keeping up with rival Monsanto in the ag biotechnology field.

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