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Agrium Inc. (USA) (NYSE: AGU) shares have come down about 10 percent in the last few months after a nice upside run in late 2014.
Moving into the second half of 2015, will the company be able to post strong enough results in order to give its stock the boost it needs to proceed higher? Will commodity prices globally give the company's customer base the cash it needs to maintain, if not increase, its purchases from Agrium? Let's take a look at the fundamental and technical picture for Agrium to get a better idea of what may be in store for shareholders going forward.
What The Bulls See
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Some cheap valuation metrics: An enterprise value of $18.78 billion that trumps the market capitalization of $14.9 billion, a price-to-sales ratio of 0.94, a price-to-book ratio of 2.39 and a PE ratio of approximately 12 versus estimated EPS growth of 17 percent for next year.
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Net profit margins of 4.67 percent that spin off positive operating free cash flow of $1.26 billion annually.
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A return on equity of 12.43 percent.
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An acceptable balance sheet picture: A debt-to-equity ratio of 76.35 percent and a current ratio of 1.35.
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An attractive dividend yield of 3.4 percent annually.
What The Bears See
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Negative levered free cash flow of $521.88 million for the year.
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A return-on-assets of only 3.93 percent.
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$903 million in cash versus total debt of $4.8 billion.
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A fairly low estimated revenue growth rate of 4.6 percent for next year.
The Technical Take
Technicians note that Agrium shares are trying to put in a short-term bottom after posting a "hammer" candle in May on the monthly chart. The hammer candle in May created a support level at roughly $102.75, which roughly corresponds with the horizontal line support created by the November intra-month peak.
The long-term uptrend line, however, comes in lower at around $97-$98. Resistance for shares, technicians note, comes in just above $110 and is backed up by additional resistance at just under $120. They further note that there is no clear advantage for either the bulls or the bears in the very short term.
Overall...
Based purely on the technicals, sellers may try their hand at new positions between $110 and $111. Meanwhile, buyers may enter cautiously at $102-$103 and more aggressively at $97-$98.
Agrium and its brethren in the agricultural chemicals space would benefit from a bit of an inflation scare. Commodities prices, especially in the space, have been depressed for quite a while. This has acted as a weight around the neck for Agrium and its peers.
See more from Benzinga © 2015 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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Agrium Inc.
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CODE : AGU.TO |
ISIN : CA0089161081 |
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ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
Agrium Inc. is a producing company based in Canada. Agrium Inc. is listed in Canada and in United States of America. Its market capitalisation is CA$ 20.0 billions as of today (US$ 15.9 billions, € 13.3 billions). Its stock quote reached its lowest recent point on December 29, 2000 at CA$ 10.00, and its highest recent level on December 29, 2017 at CA$ 144.58. Agrium Inc. has 138 175 400 shares outstanding. |