Agrium (AGU.TO)

Agrium (AGU-T) & Potash (POT-T)? If you hold these already, they are probably good holds. Sold this one about 18 months ago, so doesn’t own either. Had thought the outlook for the fertilizer side was going to be a little bit weak, so going into a weak cycle for a couple of years they’ll have a tough time. He had always liked the retail side on Agrium, but that is now going to be diluted down. He would consider this a Hold from here.

(Top Pick Jun 22/15, Up 10.75%) It is the only AG stock he owns. He was not enthusiastic about the merger. He has not bought it recently and does not plan to, but he will watch it. The world has to be fed.

They will be merging with Potash (POT-T) which is a good thing. He likes this because it is diversified. There also will be better times ahead on the potash side.

Agrium and Potash have gone through a pretty good basing period, and technically have broken out. You could probably own either one. He prefers Agrium, which gives a broader base. Ultimately, they are going to trade in line with each other. They have both pulled back recently, giving you an entry point. You don’t want to be overly focused in this group.

These types of companies tend to do well in the 2^nd half of the year, from August to December 31. This is because a lot of farmers tend to spend their money at the end of the year. In January, you tend to find some weakness. This one is starting to pull back now, and he would be looking to exit if it broke below its trend line, a little bit lower than where it is today. Probably around $132.

AGU-T vs. POT-T. If you want exposure to the AG space, there are other possibilities. These are commodity related stocks. AGU-T has more retail. They are trying to tie the knot. It looks like a good marriage but AGU-T holders probably don’t need more commodity exposure. He prefers others.

They are able to make pretty good money, even in this low fertilizer environment. Fertilizer prices are still in the doldrums. This whole sector has ignited, and they are all starting to take off. Long-term he likes this, but if you are short term, he would Sell a Call on this or trim back on your holdings.

Has loved the stock in the past, but sold it in the past with the anticipation that he would be able to buy it back. Then the Potash (POT-T) merger appeared, and he is not keen on Potash at all. Subsequent to that, this stock has moved up. He would be a little cautious. Wait to see what happens after the merger and how things work.

He likes the deal with Potash (POT-T). He is a Potash shareholder and has suffered alongside it. Started buying it on its initial dip, and it has gone south from there. Now we are seeing commodity prices turn up. This will be an agricultural giant on the world stage. Dividend yield of 3.51%.

Doesn’t like Potash (POT-T), and doesn’t see the proposed merger making sense. They indicated the synergies will show up in about 10 years, which is a long time to wait. He would definitely be a buyer of the retail side if they spun that off.

This company is on the cusp of a transformational transaction. POT-T has offered to merge with AGU-T in an all stock transaction. Each of the legacy companies will own half of the new business. He thinks this is not a great deal for AGU-T. The potash market is well known to be oversupplied. POT-T is probably at trough levels of earnings. He is hesitant with both of them.

He sold it 15 months ago as the valuation got nice and the outlook was going to be tough for a couple of years. There is skepticism about the merger having the synergies they are claiming. He will stay out of it until he sees how the merger is going and would perhaps buy on a dip then.

You might want to wait until the merger vote with Potash (POT-T) happens. All the indications are that it will likely go through. Feels there are significant cost cutting opportunities for them.

AGU-T vs. POT-T. How much are the stocks going to be worth after the merger? A lot of the value has been squeezed out of the play. POT-T is more of a deep value play. POT-T will give you a little bit better yield and is his preferred.

AGU-T vs. ADM-N. AGU-T has the merger firmly baked into the stock. ADM-T is well positioned with good commodity exposure and from here has a good 15-20% upside in the stock. They don’t use opportunistic hedges, but have a commodities trading desk and lock in some of their contracts.