Agrium Still Growing Strong

Agrium, Inc. (AGU), based in Alberta, Canada, is a major retailer of agricultural products and services in North and South America, a leading global wholesale producer and marketer of all three major agricultural macronutrients such as nitrogen, potash and phosphate and a premier supplier of micronutrients and specialty fertilizers in the U.S. and Canada.

The company is growing through acquisition and organic expansion. The acquisition of United Agri-Products (UAP) is driving revenues and profits supported by an expanded product line in the major business segment. Rising global prices for nitrogen, potash, and phosphate leveraged by strong demand augur well for AGU.

The company also has a significant free cash flow. Therefore, we rate the shares a Buy with a target of $90.00, or 10.9x our 2008 estimate. Currently, Agrium is trading at 9.5x our 2008 estimate of $8.27.

Posted in Categories: Canada, Contributor, External Research, Stocks, USA.

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