Agrium (AGU.TO)

The period of seasonal strength for some of these agriculture stocks tends to start right now, and go through to September. It then dips in September and then start to rise again to the end of the year. This one has been resisting quite consistently at the 50-day moving average at around $124, and is still pointing lower. Today, it broke a level of support at around $120. The buying momentum is not there. Agriculture orders for chemicals is about half of what it typically is for the first 4 months of the year.

(A Top Pick June 27/16. Up 9.95%.) The long-term case is that the world needs more food, and to maximize production, you need fertilizer. They have a great retail business which continues to grow. He wouldn’t be inclined to own it here because they are going to merge with Potash (POT-T), which will make them a major player in potash which, in the short term, creates quite a few questions. He would avoid this here.

The stock got pricey, and he is not keen on Potash (POT-T) which is merging with them. He wished that they had both stayed independent. If it got down under $100, he would have another hard look at this.

She likes it and owns it. This is her exposure in that space. It is the increasing demand for nutrients in emerging markets. Also, they have a retail operation that protects them went prices turn down. They are merging with POT-T when potash prices are near trough levels. She likes the space. The industry is consolidating. There is increasing demand on nutrients.

Potash (POT-T) or Agrium (AGU-T)? Had really liked Agrium because of its diversification. Then he saw that they were going to merge with Potash. To him, the merger takes away a lot of the longer-term merits of Agrium, so he took profits. Not sure he would look at either one.

Merging with Potash (POT-T) and looking to get $500 million in synergies out of it. The stocks haven’t done well. Agriculture stocks tend to do much better in the 2^nd half of the year, and some of the fertilizer stocks can start picking up towards the end of June if things are set up right for them. Once farmers get their money, they look to reduce their taxes, so they spend it on fertilizers and equipment for the next year. Put this on your radar and take a look at it in a couple of months.

(A Top Pick Feb 22/16. Up 14.53%.) This has been one of his favourite stocks because of the long-term need for food, fertilizer, etc. The merger with Potash (POT-T) bothers him somewhat.

This is currently at a cyclical low. Normally he tries to find this when it starts to hit that inflection where it starts to recover the ROC. Currently it is going the wrong way so there might be some weakness in the short term until they can prove their results, but in the long run, it has been a very good company and it is at a pretty reasonable valuation.

Chart shows this is retesting old highs, which is always positive. It means buyers are persistent and they don’t mind paying prices that were previous highs. It had a little correction which is always healthy. He likes this.

She has held it for a number of years. It was always her preferred play in that area. Nutrients should have a good long term demand. But this industry can get quite cyclical because using them can be put off for a number of years. They have a retail operation which cushions them more than POT-T. POT-T is buying them at the trough of the commodity price. (Analysts’ Target: $141.06).

Agricultural is starting to perform better. This one gives you great exposure across retail and products. It is very close to making new highs. This is the right time of the year to be buying agriculture stocks. He wouldn’t have a problem buying this, but the group is not one of the strongest sectors in the market. He prefers other places.

In the midst of a merger with Potash (POT-T), so it is being whipped around a little by arbitragers, etc. It is probably pinned here for a little bit pending some sort of resolution on the transaction. He is bullish on agriculture generally, so this is a name you could own, but doesn’t think you will make a lot of money in the next 2-3 years.

In the midst of finalizing their merger with Potash (POT-T), which is slated to close some time mid-year. There are obvious distractions that come with that, and he doesn’t see a big move in the stock between now and when the merger finally closes. You are able to look forward to some synergies upon the closing of the merger, which is a positive. Also, you will now have a very, very dominant player.

Merging with Potash (POT-T). Both companies have some form of economic moat in that they are a large-scale producer of potash. However, they are often price-takers rather than price-makers. Both companies, in the merged state, should continue to do well.

This is involved in the merger with Potash (POT-T) right now, which will have an impact on pricing for the next little while. Seasonally, the stock has done well from around the beginning of October right through until the 2^nd week of February. However, the merger is going to have a greater impact on the stock, one way or another. The period of seasonal strength ends in the middle of February, so it has about another 3 weeks to go.