Jeff Macke is one of the more cynical panelists on Fast Money, and disclosure indicated (on 7/11) that he owns AGU.
Gehl Company shares up over 116% Monday on acquisition news
9/8/2008 10:30:26 AM | Stockhouse Editorial Staff
Company signs definitive agreement to be acquired by largest shareholder.
Shares of Wisconsin’s Gehl Company (NASDAQ: GEHL, Stock Forum) surged more than 116% to $29.53 in early trading Monday after the company announced that it had signed a definitive agreement to be acquired for $30 per share by its largest shareholder, Manitou BF S.A., a manufacturer and distributor of material handling equipment headquartered in France.
Gehl Company, which manufactures compact equipment used worldwide in construction and agricultural markets, says the transaction, with an aggregate enterprise value of approximately $450 million, will be effected through a tender offer for all outstanding shares of Gehl by a Manitou subsidiary, Tenedor Corporation, followed by a second step, cash-out merger.
The definitive agreement provides that the tender offer, which commences today, will remain open until October 20 unless extended.
Yes, I've been looking for this news to surface.
Calgary — The Canadian Press Published on Wednesday, Dec. 16, 2009 10:47AM EST
Fertilizer producer Agrium Inc. (AGU-T66.070.120.18%) says its 26 per cent owned nitrogen plant in Egypt has secured more than $1-billion (U.S.) in financing from local banks to help pay for the plant's expansion to triple output....
Under the financing plan, Agrium will not be required to put any further equity into the project, the company said.
Source: Seeking Alpha 12/2/08:
Five key quotes from Deere & Co. FQ408 conference call: (DE)
For the first time the company saw more than 50% of its AG [agricultural equipment] sales come from markets outside the U.S. and Canada.
For the 2009/2010 crop year, commodity prices remain very attractive... Forecast prices, though down from recent levels, are higher than the past several years. Further, they are at levels that permit our farm customers to earn a good return.
U.S. farm cash receipts for 2008 and 2009 are at good levels and up significantly from most recently as 2007… Our outlook for industry sales of agricultural equipment in the U.S. and Canada is up approximately 5% in fiscal 2009. The increase is being led by higher sales in large tractors and combines, partially offset by lower industry sales for cotton equipment, small tractors, and equipment commonly used by livestock producers [who] have been hurt by the economic slump… largely because of higher feed costs.
Potash Corp. Posts Record Q2 Earnings
by: FP Trading Desk posted on: July 25, 2008
The vote in favor of a strike by unionized workers at PotashCorp of Saskatchewan (POT) may lead to a production loss as the three potentially impacted facilities represented roughly 30% of the company’s production in 2007. However, the tight potash market means the financial impact from a work stoppage could be mitigated by higher prices for the commodity, according to RBC Capital Markets analyst Fai Lee.
....If the shares come under pressure as a result of the labor dispute, the analyst recommends investors pick some up. However, he suggested a hedge in buying other North American potash producers like Agrium Inc. (AGU). Mr. Lee rates Agrium at “outperform” with a $140 price target.
PotashCorp believes it has made a full, fair and responsible offer to the United Steelworkers and is hopeful that a settlement will be reached.
The analyst noted that the collective agreement for the three mines expired at the end of April. "However, it is prepared for any contingencies."
U.S. Farmland Values Reach Record on High Crop Prices (Update2)
By Alan Bjerga
Aug. 4 (Bloomberg) -- U.S. farmland values are at a record high even as the rest of the country suffers the worst housing crisis since the Great Depression, with the highest crop prices ever pushing up agricultural real estate.
The value of all land and buildings on farms averaged $2,350 an acre at the start of this year, up 8.8 percent from a year earlier, the U.S. Department of Agriculture said today in an annual report. Surging corn, wheat and soybean prices boosted values in the Northern Plains, which includes Kansas, Nebraska, North Dakota and South Dakota, by 15.5 percent, the biggest increase in the country, according to the report.
The boom reflects high commodity prices that may push net farm income to $92.3 billion this year from $88.7 billion last year, according to the USDA. The gains make farmers more likely to buy fertilizer and seeds from Monsanto Co. and Agrium Inc. and make new investments in tractors and trucks, said Bruce Babcock, director of the Center for Agricultural and Rural Development at Iowa State University in Ames.
Corn is one of 19 contracts that make up the DJ-AIG Commodity Index. I wanted to answer a few questions about what makes up that index at present time.
The violent retreat over the past month of many of these components has sent the index to an interesting spot. As I Buzzed about earlier this week, if I’m right about a multi-year secular uptrend driven by fundamentals, you don’t get too many technical setups of this kind along the way. And when, not if, I’m wrong with trades I choose to be taken out with tight stops while maintaining a basket of core longs. My trading diary is quite clear about the fact that the key to a secular shift is surviving to see it happen. So I trade all the technical indicators away in a heartbeat for one set of strict sell disciplines based solely on my P&L, instead.
There's nothing magical about a 200-day moving average for the DJ-AIG as shown above. There are plenty of reasons it could be sliced right through. But I’d suggest plenty more reasons and bids rest below if this cycle resembles even an average one. My firm has studied 248 years of commodity prices. The CRB Index has doubled since 2001 in what we count as the seventh bull market since 1760. We use the CRB for this study because it has a very long history. The DJ-AIG doesn't but is now more efficiently weighted in my view. After the recent plunge, it's now all the way down to being only up 10% year-to-date.
The correct assumption is that commodities have run hard in those seven years. But as I shared earlier this year (and we’re right back at those levels), the correct context into which it rarely gets held up against might be more helpful to share. If this bull is broken it would be breaking all-time history for the shortest run on record. We would be only half-way home in terms of average price rallies in the six prior bulls and one-third of the way done in how long they lasted. Oh, and in none of those did I find a billion or two new capitalists to feed either.
Stripping out all opinions and projections and simply looking at what has happened over 248 years of price data, you would see that none of those prior six bulls stopped at a double. Not one stopped at a triple either. As for where we are now in 2008, if you add all six prior CRB bulls together you actually get +2008% on the nose, and that’s an average of more than 334% per bull, which lasted an average of 21 years. Kinda puts this recent “huge double” over seven years in context huh?
A recent article in Barron's reports on fertilizer and Mosaic:
"...a review of demand peaks during the spring and fall, and the troughs in between, led Credit Suisse's chemicals analyst to conclude that no meaningful evidence of demand destruction exists in the fertilizer sector.
This opinion signifies a potential bargain-bin opportunity, according to Sveinn Palsson, a Credit Suisse derivatives strategist."
Agrium stock set to bloom: UBS
Posted: August 07, 2008, 12:20 PM by Zena Olijnyk
Agrium Inc. has seen its shares slump since peaking at more than $116 June 19, but UBC analyst Brian MacArthur said that its strong second quarter results reaffirm his view of a sunny forecast for the stock, and the fertilizer industry in general.
“We continue to like Agrium over the long-term as the company provides good exposure to various fertilizer markets combined with a growing retail business,” Mr. MacArthur said in a research note this week after Agrium posted earnings for the quarter of $3.81 per share, compared with guidance of $2.80-$3.00.
“While margins in retail can be lower, we believe this segment complements the portfolio well as it tends to generate more consistent profits throughout the cycle.”
Mr. MacArthur raised his earnings forecast for Agrium to $7.87 for 2008 and $12.61 for 2009 – compared to his previous forecast of $7.19 and $11,57, respectively. He also raised his price target on the shares – to $133 from $130, a 53% premium over yesterday’s closing price of $87.10. However, he derived his new target by using a multiple of 9X his estimated 2009 cash flow per share ($14.75)for Agrium instead of the 10x multiple he had been using.
MOS is moving up today as most of the other fertilizer stocks move down. Favorable earnings might prompt AGU investors to buy/add shares.
PotashCorp's profit of $1.24 billion, or $3.93 per share, soared above the company's entire profit of $1.1 billion, or $3.40 per share, for 2007.
"Despite the recent onset of a global economic downturn, the need for food is not abating. That enabled us to utilize our unique strengths in each nutrient to achieve the best quarterly performance in our history, producing record cash flow and gross margin (of $1.7 billion) while also preparing our company for the expected growth in potash demand."
FEBRUARY 15, 2010, 11:44 A.M. ET
Yara to Acquire Terra in $4.1 Billion Deal
A WALL STREET JOURNAL ROUNDUP
STOCKHOLM—Norwegian fertilizer company Yara International ASA agreed to acquire Terra Industries Inc. in a deal valued at $4.1 billion.
CF Industries Holdings Inc., last month withdrew a $3.2 billion offer to buy Terra, ending a year-long effort. CF said rising values in the fertilizer sector would have required the Deerfield, Ill., company to increase its offer. CF, meanwhile, has been trying to fend off a $5.1 billion tender offer from Agrium Inc. of Calgary, Alberta.
(end WSJ article)
Yara Chief Executive Joergen Ole Haslestad: "We expect the U.S. markets to pick up in a big way," he told reporters.
Also: "Analysts say that consolidation across the nitrogen-based fertiliser industry would continue as leading players seek to benefit from bigger scale and wider geographical reach."
Agrium CEO has no worries about stock price
Even as grain prices come back down to earth, he says growth is still in the cards for fertilizer producer
August 7, 2008
The recent selloff in fertilizer producers' stocks has been overdone because the best is yet to come, the chief executive officer of Agrium Inc. contends.
"Recently, it seems, investors have become more focused on a correction in grain prices from the unprecedented high levels reached this spring during the flooding in the U.S. corn belt," CEO Mike Wilson told analysts during a conference call yesterday, after the company reported the highest quarterly profit in its history.
"We've always maintained we ... don't require $8 [U.S.] corn prices to support strong global nutrient demand. In fact, we think corn in the $5-to-$6 range represents healthy returns for farmers, which in turn supports strong long-term demand for crop inputs."
Mr. Wilson said a lot more growth is in store for his company, even though the profit of $636-million or $4 a share it reported yesterday for the three months ended June 30 was more than double the previous quarterly high of $229-million or $1.70 a year ago. Revenue rocketed to $3.94-billion from $2.09-billion.
"As pleased as we are with our financial performance ... we are just beginning to show our true earnings potential."
Mike Wilson, the company's CEO, remarked, "We believe the outlook for Agrium's products and businesses are as good as they have ever been, supported by excellent fundamentals for the agricultural and crop input markets."
Farmers Coming Back
Thanks to strong agricultural commodity prices, farmers are back and buying fertilizer, after a couple of years of inventory depletion. The future looks even better for the industry, according to Wilson. "While EBITDA from our retail operations this quarter was almost double last year's level, and wholesale's rose by more than 60%, we expect the improvements in the crop input markets to become even more evident in the fourth-quarter of 2010."
Mike Mack, CEO, said: "The sales figures we have presented today attest to the strength of our business in a turbulent global environment. The fundamental drivers for agriculture remain unchanged, with rising food and feed demand inevitably requiring increased use of agricultural technology in a context of limited land availability. Our confidence in Syngenta's near term as well as its longer term performance allows us to reaffirm our target for earnings per share* growth of more than 35 percent in 2008 and high teens in 2009."
The Wall Street Journal
By MARK WHITEHOUSE, SCOTT KILMAN and ALEX FRANGOS
From corn to crude, prices for a wide range of commodities are on the rise across the globe, a trend that underscores -- but could also hinder -- a gathering economic recovery.
In recent months, global food prices have been growing at a rate that rivals some of the wildest months of 2008, when food riots erupted across the developing world. Higher prices could be a positive sign that companies are gearing up for a rebound in consumer spending, or the harbinger of a return to the upward spiral that plagued consumers before the recession took hold.
The surge in commodities "is a reflection of extremely strong demand in the emerging world, and growing hopes of stronger demand in the developed world," said Jim O'Neill, head of global economic research at Goldman Sachs in London. It is "encouraging so long as it isn't too persistent."
But Hugh Grant, chairman and chief executive of St. Louis crop-biotechnology company Monsanto Co., said the recession merely "masked" the 2008 food crisis.
The price of a bushel of corn -- a ubiquitous ingredient in the U.S. diet -- rose 24% since Sept. 1. In Thailand, the price of a metric ton of rice, a staple across the region, stood at $618 in December, up 11% from September, but well below a peak of about $1,000 in April 2008. An index of global food prices compiled by the United Nations jumped 6.9% in November alone from the month before.
What's in Store for the Fertilizer Industry?
by: Early Bird posted on: September 03, 2008 | about stocks: AGU / DBC / GSG / MOS / POT / RJA Font Size: PrintEmail After being an active trader in stocks related to the fertilizer industry for the past three years, I have recognized some interesting factors that have had a huge impact on the price movements of these companies' stock prices.
Since the stock price of listed companies in the fertilizer industry peaked in June, it has slumped by approximately 30%. In the same period, the fertilizer industry has experienced 15% higher prices for the fertilizer UREA (same for CAN, Amonia etc). With the fertilizer price booms, we also are watching the prices of oil and natural gas falling sharply, which means higher margins for the fertilizer producing companies. They are reaching all time high profits for their products. Why is this so? Why does the stock price of fertilizer companies fall when they experience higher prices for their products and better margins?
I believe one answer is the food prices ("of course", you might think, but few people care about it on a daily basis). You'll find a high correlation between the corn price (same for wheat, soybeans) and the stock price of i.e Agrium (AGU), Mosaic (MOS) and Potash (POT). It is important to watch the food prices closely. That is why the global sell-off in commodities has also hit fertilizer stocks hard.
In the long term, I believe that fundamentals will win, and last week's news about China hiking and expanding their export taxes on fertilizer will yet again boost international fertilizer prices and hence give better profit. It's a proof that the demand is still strong and supply is still insufficient
And, while the oil price keeps falling, I will keep on buying. Remember, lower oil and natural gas prices gives lower costs.