Agrium Inc. $30 – Toronto symbol AGU

AGRIUM INC. $30 (Toronto symbol AGU; Aggressive Growth Portfolio, Resources sector; SI Rating: Average) needs natural gas to make its fertilizers. Thanks partly to falling gas prices, the stock has gained 20% in 2006, and 70% since we made it our Stock of the Year in 2005.

Agrium will probably earn $1.39 U.S. a share in 2006, and the stock trades at 19.0 times that figure. But earnings could reach $1.80 U.S. in 2007, which implies a more reasonable p/e of 14.7.

Agrium is a buy.

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