The Successful Investor Hotline – Friday, August 17, 2012

Article Excerpt

AGRIUM INC., $98.86, Toronto symbol AGU, rose 2% this week on news that activist investment firm Jana Partners LLC now owns roughly 4% of Agrium’s stock. This is the same company that pressured McGraw-Hill (New York symbol MHP) to split itself into two new firms: one that will produce financial-information products and one that will publish textbooks for colleges and schools. McGraw-Hill is a recommendation of Wall Street Stock Forecaster, our newsletter that focuses on U.S. stocks. Jana now wants Agrium to spin off its retail division as a separate company. These stores sell seed, fertilizer and other products to farmers. They also supply two-thirds of Agrium’s revenue and half of its earnings. Agrium has rejected Jana’s proposal because it feels the stores’ steady, predictable revenue streams help shield it from volatile fertilizer prices. Moreover, the company uses the stores’ sales data to adjust its fertilizer production and maximize its earnings. No matter what happens, Jana’s ongoing involvement should continue to draw attention to…