The Successful Investor Hotline – Friday, January 16, 2009

Article Excerpt

BANK OF MONTREAL $32.30, Toronto symbol BMO, has agreed to buy the Canadian life insurance business of major U.S. insurer American International Group Inc. (AIG). The bank will pay $375 million, which is equal to 19% of the $2.0 billion or $3.76 a share that it earned in the fiscal year ended October 31, 2008. Bank of Montreal’s insurance operations currently supply just 2% of its total revenue, and this purchase will not significantly expand this division’s contribution. However, insurance is a future growth area. As well, Bank of Montreal probably got this business for a bargain price in light of AIG’s severe financial problems. Bank of Montreal is a buy. AGRIUM INC. $42.06, Toronto symbol AGU, plans to write down the value of its retail operations in North America and South America by $96 million or $0.41 a share (all amounts except share price in U.S. dollars). The writedown reflects the difference between the price at which these businesses have contractually…