Agrium report updated

Agrium Inc. is updated and rated Speculative Buy at U.S. $97 or Canadian $128.

This stock is up 2.5% this year in New York, but 16.6% in Toronto.

Although headquartered in Calgary, I consider this to be more of a U.S. dollar investment than a Canadian dollar investment. (And that is unaffected by whether it is purchased in Canada or the U.S.). Most of its revenues and earnings and earnings are in U.S. dollars and for that reason it reports in U.S. dollars. The stronger stock performance in Toronto was due to the drop in the value of the Canadian dollar.

Agrium is an inherently volatile and cyclical company. Demand for its products varies from year to year with weather and farm income levels. In addition , revenues and earnings can vary greatly with its product prices that change rapidly based on the market price for its products which are mostly commodities. On top of that its costs vary greatly with the price of natural gasĀ  which is a major input into some of its products.

It has a strong long-term profits history and appears to be reasonably priced at this time.