The Successful Investor Hotline – Friday, April 12, 2013

Article Excerpt

AGRIUM INC., $94.59, Toronto symbol AGU, plans to continue expanding its retail operations after shareholders decided not to elect five nominees from activist investment firm Jana Partners to Agrium’s 12-member board of directors. The retail division has 1,220 stores in North America, South America and Australia that sell seed, fertilizer and other products to farmers. These outlets supply about 70% of Agrium’s revenue. The remaining 30% mainly comes from making fertilizers from natural gas. Jana, which owns 7.5% of Agrium’s shares, wants Agrium to spin off its retail division as a separate company. However, steady revenue streams from these stores help offset the cyclical nature of Agrium’s fertilizer operations. The stock moved down on the news, possibly because Jana is now selling some of its shares. Even so, Agrium is still up 9.0% in the past year, compared to a 1.9% gain for the S&P/TSX Composite Index. The stock is also attractive because it trades at just 9.2 times the company’s projected…