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Bonds Are a 'Safe' Investment: A Big Lie Gets Even BiggerAgrium is the No. 1 producer and seller of fertilizers for North America, including nitrogen, as well potash and phosphate products.
The company has an 8-million-ton nutrient production capacity, but production is only half the equation: AGU also has more than 400 retail outlets in the U.S. and South America – the back-end side of the revenue equation.
The top U.S. retailer of crop supplies, Agrium's products are also sold in Canada, Mexico, Brazil, and Asia. Analysts really like AGU's plan to expand, and hopefully double, this $2 billion revenue stream within five years, on global sales. The Reuters FY 2007/FY 2008 EPS consensus estimates for AGU are $2.87 to $4.04.
The risks? Analysts have their eye on volatile raw material costs. Also, any pronounced, sustained global economic slowdown would hurt Agrium's results.
Stock Analysis: Agrium is a moderate-risk stock not suitable for low-risk investors. Investors with an investment horizon longer than 2 years should be rewarded from AGU's shares. Sell/Stop Loss if you were to purchase shares in this company: $43.
Disclosure: Lazzaro has no positions in stocks. In addition to private real estate holdings, he owns corporate and municipal bonds, and cash certificates of deposit.
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