Worth Holding Despite Varied Risks

Article Excerpt

AGRIUM INC. $55 (Toronto symbol AGU; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 134.0 million; Market cap; $7.4 billion; SI Rating: Average) has gained 60% in the past year, as rising crop prices, and the politically inspired ethanol boom, have pushed up fertilizer demand and prices. Agrium has also benefited from a recent flood at a potash mine in Russia, owned by rival fertilizer producer Silvinit. Potash supplies 15% of Agrium’s profits, and a long disruption at Silvinit could potentially double prices. In the three months ended September 30, 2007, Agrium’s earnings soared to $0.38 a share from $0.01 a year earlier (all amounts except share price and market cap in U.S. dollars). That’s mainly because production problems in the year-earlier quarter cut output and raised costs. Revenue grew 20.5%, to $989 million from $821 million. The stock trades at 19.5 times the $2.91 U.S. a share that Agrium should earn in 2007. That’s high for a cyclical fertilizer maker. In addition, Agrium…

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