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Agrium Inc. Message Board

  • milachka2001 milachka2001 Oct 10, 2013 5:17 AM Flag

    Question for Abbaman7

    I'd like to pick your brain about AGU/MOS/POT.

    I have a position in AGU and MOS. I'm doing fine on AGU, but lost big on MOS when the BPC cartel blew up.

    From your posts I get the impression that you believe that POT has the best potential to move back up as they are more or less done with capital expenditure for the mid term. So I am considering to shift at least 50% of my MOS position to POT. Any nuggets of wisdom about this approach?

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    • Even though I like POT the best, I made a long term 'field' bet on agricultural nutrient stocks in 2007, purchasing significant amounts of POT, MOS and AGU. Over the years, I have added to these positions although I have not increased my positions in any of them this year or last year. It was the case that in terms of market value, I expected my POT position to remain as the most significant, then AGU and then finally MOS. However, as a result of the remarkable drop in POT's share price over the past 2 months, my POT and AGU positions have roughly the same value. My MOS position remains materially smaller than either that of POT or AGU. Whether that will stay that way remains to be seen but that might tell you something about my sense of the long term prospects for each of these 3 entities.

      I would never shift from one to the other regardless of whether I thought one was better than the other; that is the nature of a field bet in the sense that you don't bet the ranch on any single stock in the sector but try to maintain a rounded out position with all of them. Still, you can achieve balance by doing what you propose and I favor balance.

      Each of these 3 stocks have some things going for them and some things going against them. For the moment though, let's consider your contemplated move of shifting a portion of your MOS position to POT. The impending end of POT's CAPEX after 2014 should indeed cause some recovery from today's share price. The reason might have something to do with the market for its goods but it could also have something to do with additional dividend increases and share repurchases. But you can't expect any of that this year. MOS, on the other hand, has something likely to occur this year which will likely have a material bearing on its share price; namely, the repurchase of 10% of its stock after November 26th. Nevertheless, I think the key for you is to decide what kind of investor you are and what your time horizon is.

    • know this is not for me,but anyway let me post a no-brainer one. Between POT and MOS though i would try to be cautios investing in a momment when potash ,and phosphate prices are still under pressure in the short-médium term, Probably if i had to decide with one of the two ,certainly i would stay with MOS.If you check the long term chart,POT has been sliced (splii) in several ocations while MOS has not.This means that buying POT you are buying a slice of pizza while buying MOS you get the whole pizza. besides MOS has a lot of spare cash to use either in buybacks ,dividends ,debt payments (mos has almost no debt anyway) or whatever .Anyway if i were you i would invest neither in MOS or in POT and unless you are already overloaded with AGU i would certaintly buy more AGU. Thats the best of the three ags.

      Thats a very intuition subjective answer i know.Make your own dd.

      GL

 
AGU
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