Both gain from takeover

Article Excerpt

POTASH CORP. OF SASKATCHEWAN INC. $156 (Toronto symbol POT; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 296.6 million; Market cap: $46.3 billion; Price-to-sales ratio: 8.1; Dividend yield: 0.3%; SI Rating: Average) is the target of a $130.00 U.S.-a-share hostile takeover offer from BHP Billiton Ltd. (New York symbol BHP). We first added Potash Corp. to our Aggressive Growth Portfolio in our June 2009 issue as a hold. At that time, it was trading at $121. By October 2009, the stock had dropped to $106, and we changed our recommendation to buy. Based on today’s exchange rate, Potash Corp. shares trade at 15.7% more than BHP’s offer. That suggests investors expect a higher bid. Even if no new bid emerges, BHP’s offer represents a 27.2% gain over our first buy recommendation. Potash Corp. is now a hold. AGRIUM INC. $76 (Toronto symbol AGU; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 157 million; Market cap: $11.9 billion; Price-to-sales ratio: 1.2; Dividend yield: 0.2%; SI Rating: Average)…

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