July 23, 2008 - Agrium, Inc. (AGU-NYSE) produces and markets agricultural nutrients, industrial products, and specialty products worldwide, as well as the retail supply of agricultural products and services in North and South America.

The Wholesale segment manufactures, purchases, and markets a range of nutrients, including nitrogen-based, potash, and phosphate-based crop nutrient products. It also owns and operates facilities that upgrade ammonia and urea to other products, such as nitrogen solutions and nitric acid. In addition, this segment operates fertilizer granulation and blending plants in the United States.

The Advanced Technologies segment produces and sells controlled-release crop nutrient and professional products to the agriculture, specialty agriculture, professional turf, horticulture, and consumer lawn and garden markets. It also offers pest control products to the structural pest control industry, including pest control in residential and commercial structures. The company was founded in 1931. It was formerly known as Cominco Fertilizers, Ltd. and changed its name to Agrium, Inc. in 1995. Agrium is headquartered in Calgary, Canada.

Agrium sales were up 35% in the first quarter compared to last year's first. Much of that came from higher prices in Wholesale business, across all product lines. Earnings were up to $1.23 in the quarter vs. a negative 8 cents in the same quarter last year. For this quarter, analysts look for $3.15 (yes, just for the quarter), then $1.69 in the third. For the year, they see $8.25 this year and $11.11 next year. Just 60 days ago, analysts estimated $7.05 for this year and $8.38 for next. That's an indicator of how well AGU's products and services are doing.

And why not. Economic growth isn't happening in the U.S., but it's thriving in developing countries where the need for better and more crops is almost insatiable. Furthermore an increase in biofuel demand means more fertilizer sales.

The company is also growing from acquisitions, having recently completed the purchase of United Agri Products (UAP Holding) for cash ($39 a share). Initial concerns about antitrust issues in the U.S. were overcome which delayed the completion. Another corporate move: acquiring a 70% interest in Common Market Fertilizers S.A..

Beside the concerns for antitrust, the company is now in a debate with the Egyptian Parliament on the relocation of a plant. The company doesn't consider this a viable option. One reason: the new plant would have to be in partnership with the Egyptian government. If unsuccessful in efforts to recover its costs, the company could take a $280 million write off. The Egyptian government is offering some options to the company, including sale of the plant to one of its government owned nitrogen facilities.

Other numbers: One UBS analyst has a price target of $130. Market cap is $14.65 billion on 158 million shares. Price to Book is 4.65. Profit margin was 11.15% in the last 12 months, Return on Equity 28.53%.
There's $1.76 billion in cash sitting the treasury, equal to $11.15 cash per share. Current assets over current liabilities is 2.4. Book Value is $20.78. In the last 52 weeks, the stock is 118%. P/E is 20.

Agrium is in the right place at the right time with the right products and services. With a global reach, it doesn't need any one country or economy to do well, for its bottom line to grow. With increasing demand for food and biofuels, the company seems able to deliver ever better earnings, especially when it can raise prices on all its products.

- Company Web site: www.agrium.com

- Ted Allrich