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TSE:AGU

Agrium (AGU.TO)

BUY ON WEAKNESS
Would you buy Viterra (VT-T) in order to get this cheaper? There wouldn't be enough of a discount. He would wait for a bad market day. Prefers in the low $80’s.
TOP PICK
Likes the VT deal. Likes AGU long term. It is based on the population growing in emerging markets. China will need more basic food and AGU will supply the Nitrogen and fertilizer. China has sharply increased its demand for corn imports. AGU is the third largest outlet for farm goods in Canada.
HOLD
A stock he uses extensively in his growth section. A very volatile stock. This is usually the time of year to think about taking profits. But he is not pulling the trigger yet. They are in this takeover of VT, They did take over a lot of assets in Australia a year ago and it is not in the stock. And fertilizer was underutilized by farmers last year. Could have a very good year and is very well managed. Not the time to get into it.
BUY
You will end up doing very well in the Agri stocks. Could benefit from the VT transaction. In a year or two it is highly likely your price will be higher.
DON'T BUY
It is tough to know if when they do an acquisition, would it increase their stock price or not. He would not get too caught up in M&A stories when it comes to investing. It is not a name he would be chasing in this environment.
TOP PICK
Looking for a 30% return in the next 12 months. Have escaped the short-term pressures of potash. Also have a retail business. Located in Australia, Argentina, Canada and the US.
BUY ON WEAKNESS
Agri groups have looked pretty good. Buy on a pull back. He sold on a rally and is looking at POT a bit more, but would add to positions on a pullback.
BUY ON WEAKNESS
This is a good Buy at $80 or below. Nitrogen complex looks very interesting and the cost advantage of low-cost natural gas is definitely big for this company.
DON'T BUY
Most cyclicals here are not really getting their model price. He thinks $92 is as far as it will get. There are more opportunities elsewhere.
DON'T BUY
Simply not cheap enough. A pure fertilizer play. When corn prices rise, farmers use more fertilizer to boost output. Corn prices are down and they don’t have to use fertilizer every year. It stays in the ground. Billet proof balance sheet, but just not cheap.
HOLD
Longer term, agriculture is a great space to be in but over the last 12 months or so, you are seeing lower highs and lower lows. It has kind of broken above the 200 day moving average so it is tricky to see where it is going to go going forward.
BUY
It is two businesses – retail + wholesale. Likes the long-term outlook for corn even though ethanol subsidies have gone. Prefers this to POT
BUY
Links agriculture in general. Delayed fertilizer buying has created a bit of uncertainty but in the long-term, she likes the fundamentals and its positioning, particularly nitrogen with this access to low-cost gas in North America.
COMMENT
Fertilizers have been hit with the commodity flue and, in particular, as of late phosphate prices have been coming down, urea prices have been tanking and commodity prices are going south a lot faster than people anticipated. Recently jacked the dividend up to what he thinks is a sustainable basis. Looking at this for when he increases cyclicality in his portfolio and would be one he wants to own.
COMMENT
Food story is a long-term story but unfortunately the market we are in is not a bull market so the long-term stories will give you volatility and that is what has happened here. You are going to see some growth and some pretty good numbers. These things really have to be traded around core positions.
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