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TSE:AGU

Agrium (AGU.TO)

TOP PICK
May be in for some weakness in the next few months but he is positioning himself for 2009. Strong profit growth. 6X earnings. Believes there will be stronger growth in China over the next decade.
BUY
Got caught up in the whole agriculture boom. If you believe the secular trend for global growth is going to emerge, the agricultural companies will come back. Trading at about 5X earnings. Good diversification.
BUY
At current levels, Agrium (AGU-T) and Potash (POT-T) are both looking compelling. Difficulty in that the fundamentals of both companies are overwhelmed by the credit crisis and fears in some circles that agriculture will not have access to enough credit to be able to farm at the same pace as in the past. Could go lower before going higher. Good for a 5-year hold.
BUY
Starting to see a bottom in the last week. MACD gave a buy signal last Friday. Looks very attractive.
TOP PICK
Price to earnings is 4.2 times this year and 3.7 next.
DON'T BUY
If we here to buy one, it would be POT
DON'T BUY
50% of its results from selling agricultural products throughout North America, not just pot ash. Retail business will help it do well through all the cycles. Starting to look more favorably at this from a valuation point of view but don’t count on it going back up where it was before.
TOP PICK
Fertilizer prices have come off the top, but there is still strong demand out there. Trading at such a low multiple, less than 4x next year’s earnings.
BUY
Despite a global recession, people HAVE to eat. Diets are getting more protein rich and that implies you have to grow a whole lot more grains that the animals are eating. Terrific opportunity here for the entire sector.
WAIT
Dropped because an analyst got nervous and sounded the alarm. Be Cautious. He likes it but thinks they may go lower. You could do some buying around these levels but don’t get the whole position and don’t overweight.
DON'T BUY
Wheat, corn and soy are falling sharply. It’s not necessarily economic for farmers to buy expensive fertilizers. We are going to see further weakness in commodities. We are in a commodity bubble that is in the process of bursting, and fertilizer is one of them.
WAIT
This is going to be the worst quarter for price drop for corn. There’s some emotion working against it. Wait a little on this one, but it’s fairly valued.
TOP PICK
Not dependant on one of the fertilizer minerals. Less than 5x earnings. Safer than small cap plays.
HOLD
Likes Agrium (AGU-T), Potash (POT-T) and Mosaic (MOS-N). Unlike oil and gold, fertilizer prices have not been fluctuating. Strong demand from India and China and a good year for the farmers in North America. Patience will be rewarded.
DON'T BUY
Still not comfortable with the price level. Feels a lot of the estimates on earnings were based on forecasts of the rise in demand over a very short time and extrapolating it into the future.
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