It was spun off in November from two big European drug and chemical companies, Astrazeneca and Novartis. This was a joint venture they did in agricultural chemicals and the genetic engineering of seeds. He sees potential for the ag chemical division's crop protection business to grow as the trend to use less chemical-intensive methods evolves. As more organic pesticides are developed that are safer for consumption, there's room to engineer plants that withstand these pesticides. As this scenario becomes a reality, he believes Syngenta will be well positioned to deliver its products more effectively because of its size.
Farmers are very skeptical of new companies and products.
While Syngenta's agri-chemical business can generate predictable cash flows, its genetic seed business can provide bigger potential. Genetically modified plants will prove to be safe for human consumption, Imperiale believes, and that will drive this market area. Meanwhile, investors should get some reward from the company's efforts to cut costs. Add to that the fact that no Wall Street analysts are following the stock, and Imperiale thinks it's a good story waiting to be discovered. He believes the lack of analyst coverage is because the company doesn't have a long stand-alone operating history.