Agrium (AGU): A good report would give the stock another boost

By Timothy Lutts, Chief Investment Strategist and Editor of Cabot Stock of the Month
From Cabot Wealth Advisory 7/23/12 Sign up for free Cabot Wealth Advisory e-newsletter

Fertilizer stocks have been doing well this year. The reasons? Drought, rapidly rising prices for corn, and a growing global population. One of the best stocks recently earned mention in Cabot Top Ten Trader.

Cabot Top Ten Trader featured Agrium (AGU) on July 16, writing, “The story on fertilizer manufacturer Agrium is very similar to that of CF Industries. Agrium makes nitrogen, potash and phosphate-based fertilizers and other agricultural products, 88% of which are distributed in North America.

“Recent droughts have created shortfalls in crop production, and that has raised the price of agricultural commodities. So farmers are encouraged to buy more fertilizer to try to take advantage of the situation. The company recently announced that its Q2 results would be near the top of its guidance, as strong demand is keeping prices high for many products. Agrium had a 44% increase in revenue in 2011, and is growing both in its home country of Canada and internationally.

“In March, it was announced that Agrium will acquire 90% of Viterra’s Canadian operations and all of its Australian retail facilities in a deal with Glencore, the company that is acquiring Viterra. Investors are encouraged that Monsanto has already released strong quarterly results, and a good report from Agrium would give the stock another boost.”

Readers who bought after that recommendation are off to a good start, too.

Today, moving in sync with the broad market, AGU has pulled back from last week’s highs. Their pullbacks could last longer. But the main trends remain up and we remain bullish, so you could buy here.

Smarter, though, is to take a no-risk trial subscription to Cabot Top Ten Trader so you can see what editor Mike Cintolo is recommending now. For details, click here.

Company Details

Agrium (AGU)
13131 Lake Fraser Drive SE
Calgary, AB T2J 7E8 Canada
Index Membership: N/A
Sector: Basic Materials
Industry: Agricultural Chemicals
Full Time Employees: 14,800