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TSE:AGU

Agrium (AGU.TO)

BUY
Sales went from 900 million last year to 3.1 billion. Management says they have full earnings visibility for the next number of years. A great way to play the agricultural sector.
WATCH
Even if they only earn $10 a share, they are still trading at about a PE of 3. Has to be one of the safest areas of the market to be in. At least half their business is in non-fertilizing type products. Very cheap. Might not have bottomed yet so give it a bit of time.
PAST TOP PICK
(A Top Pick Dec 12/07. Down 42%.) Thinks it has had its run. After sit back and see what happens. Changes occurring in the crop situation and consumer demand. Not bullish about it and he has to wait.
BUY
(Market Call Minute.) Seasonality is good until the end of December.
DON'T BUY
Commodities are off and could continue to fall because Chinese allowed export of fertilizer for the first time in a long time. Very strong balance sheet. Nice stable business but there are issues with credit for farmers and about half their business is retail stores. Bad weather has made it difficult for US farmers to get their crops off.
COMMENT
Likes the fact that they are not just a pure commodity play. Their distribution side theoretically should smooth earnings but hasn't done much to smooth share price volatility.
COMMENT
Has not only come back down again to its long-term low but actually went 20% below. On a historical valuation perspective, it is dirt-cheap. Long-term food shortage is going to help. Short term, he wouldn't be surprised if the stock rallied with the rest of the market. If you Buy and don't look at the price for the next 3 years, you'll probably be happy.
BUY
Should be largely recession proof in the long-term. 2 nutrients, phosphate and nitrogen have come down dramatically and potash remains high. Got caught in the euphoria of crops and fertilizer prices and overshot to the upside. Very good company but a lot of people bought this for the wrong reasons and are still liquidating. Substantial retail presence in North America.
SELL
(Market Call Minute.) Fertilizer prices are not going anywhere in a hurry with grain prices where they are.
BUY
Fertilizer stocks tend to do well from July until the end of the year. That correlates well with grain prices. Recently came out with some really good earnings. The stock came down too far. A great buy at this level.
BUY
He has moved to essential industries and feeding the world is essential. The countries with the big growth in populations, China and India actually have a lot of money to buy fertilizer. Fertilizer prices have not come down. Made more in Q3 than all of last year. Good long-term hold.
COMMENT
Leveraged to the fertilizer industry, which is leveraged to agricultural growth, which is intact longer-term. In the short-term, commodity price has declined significantly. Shorter-term, he is cautious.
STRONG BUY
She's a big fan of agricultural stocks in general. The whole area has been crushed. Looks like a great buy at this point.
TOP PICK
Valuation call. Commodities are weakening somewhat but the stock has been decimated. Analysts are estimating a fairly strong number in 08. 2009 is a question mark in view of the falling commodity prices, but the multiple is so low that it is a very active opportunity.
COMMENT
If you asked for a stock that you wanted to own for 5 years, this would go in there along with Potash (POT-T). Very cheap. Global franchise. He wants to own it but it is just a question of when he pulls the trigger.
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