Early, Maybe, But Probably Not Wrong

My forecasts for gold, silver and oil (see previous post) seem to be working out. That's the good news. The bad news is a couple of recent additions to the RCS portfolio are still "compressing". However, A) they aren't alone -- there's a pullback in small-cap resources generally, and B) I take comfort that many of my forecasts pay off down the road.

Case in point: Delta Pine and Land. On March 30, I wrote a story for Marketwatch.com, "Cottoning Up to Profits," in which I talked about the rosy outlook for cotton and especialy stocks that dealt in cottonseed. The stock I recommended was Delta Pine and Land (DLP). I wrote:

"This $1 billion company produces varieties of cotton for sale in the U.S. and other countries. It's bringing 10 new varieties of cotton seed to market. It trades at about 20 times projected earnings (cheap), and its chart shows a breakout after a long consolidation. Our initial price target is 47 -- a 56% move higher from recent prices."

DLP closed that day at $29.63 per share. And then it spent the next three months going sideways, even down, closing as low as $27.20 on June 12, and I felt bad. But then today, the stock had some good news. From Bloomberg:

"Delta & Pine Land Co., the biggest U.S. cottonseed producer, said third-quarter earnings rose 31 percent after farmers planted more acres with cotton and bought more seed modified to resist bugs and weeds. The shares surged as much as 9.8 percent as profit topped analysts' estimates."

And here's a chart...


Maybe I just got lucky. In that case, I'd rather be lucky than smart. But this helps restore my faith that investing in undervalued, overlooked companies pays off over time, and can pay off big-time.

What's undervalued now? URANIUM! But that is a story for another day.

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