Agrium (AGU.TO)

Seasonality for fertilizer stocks is normally around the end of June through until the end of the year. However, fundamentals are not good. All the major fertilizer companies are expected to report significantly lower earnings on a year-over-year basis. Chart shows that the stock has just broken down through a key support position, and is now in a downward trend. Below its 20 day moving average, and significantly under performing the TSE composites. Watch for an opportunity after they report their 2^nd quarter results at around the end of this month.

Model price is $120, 23% upside. It is a cyclical and he would love to see it come back to the $80 region to buy more. Top side of the stock is $110. POT-T is at a higher valuation and only has a 12% upside with a ceiling of $43.50.

Good entry point. Have the ability to have cash on hand to weather the storm. Looking at population trends and crop yield enhancements, this is one of the best ways to invest in agriculture. Target price of $120.

This is much more diversified than Potash (POT-T). Likes that they are in Australia. Any price under $100 is good. Feels they have a lot of potential.

Pulled back from a high of roughly $115. There has been a fight about protein in the US and globally, and this starts with the fertilizer side. Likes their retail side. Also, you have a mixture of potash in nitrogen. At 10.5X next year’s earnings, he can see it going through their all-time high. Yield of 3.31%.

This is a sector that he likes, but prefers the yield on Potash (POT-T) a little better. This company still has capacity to increase their dividend. One worry he has is that they have really benefited from low natural gas prices, and natural gas prices are up significantly year-over-year. Depending on how storage injection goes, there could be another upward move on natural gas prices next year.

Recent 6% decline is noise, but since it failed to make a higher high recently, he would be cautious and take some money off the table.

It has better diversity of product than others in the industry. When a stock doesn’t drop any more on bad news, it is time to look at it. Industry fundamentals are reasserting themselves.

Has been recently adding to his holdings at under $100. He has a strong belief that this is one of the best run fertilizer companies that is integrated. Have operations in Australia. As the crop season advances, he thinks you’ll see this one come back. The premier company in this area.

This company and Potash (POT-T) have both been enormous long-term winners over the last 10 years. Very, very attractive long-term return. You not only have exposure to fertilizer, but you also have it with their stores.

Admires this company and has almost taken positions in it. Agricultural prices have not been strong and their big input costs of natural gas have gone up so there is a squeeze on margins. Potash market has never really resolved itself with prices meandering around the $300 range. Catalysts for the stock to go higher are not there at present. Still a very good retail division and still very profitable in nitrogen and potash. Good dividend.

A very well managed company with diversification in retail and wholesale manufacturing of fertilizers so you want to own this in the long-term. Shorter-term, it is more a function of grain price, farmers’ income and, in Canada, a lot of grain is having trouble getting out. Feels in the short term this is not going anywhere, but long-term it is a very well managed company that you want to own.

Earnings stank. Too bad because this is a very good company. A vertically integrated company in the industry. A safer bet than some of the other one product companies. The stock has done very well over time and didn’t take the big dive that Potash (POT-T) took. Feels it is a fully priced stock.

Has had some difficulty recently. It broke a double top pattern, established a downward trend, is below its 20 day moving average and underperforming the market. It has a good seasonal period from around June to the end of the year.

When stocks stop dropping on bad news, it is time to buy them. Corn prices moved higher and most of these trade off them. Cheaper than most of the rest of the group and most of the bad news is in. This one won’t be as volatile as the rest.