3 Cheap Agriculture Stocks as Potential Takeover Candidates

Posted by on Aug 19, 2010 | No comment

BHP Billiton’s (NYSE: BHP) hostile bid for Potash Corp. of Saskatchewan (NYSE: POT) has many investors now focused upon the agriculture sector for places to invest in a tough market.

Forecasts of increased global demand for food are expected to raise prices of agricultural commodities. And higher commodities prices spur increased demand for more fertilizers.

With BHP’s announced intentions to enter the fertilizer market through acquisition indicates that management may be concerned the company will miss the boat on the coming bull market for soft commodities. The company’s Jansen Project in Saskatchewan region of Canada, which is expected to produce 8 million tons (approximately 12% of total world production) of potash annually, won’t be online for several years.

BHP’s decision to gain exposure in soft commodities space may set off a scramble by other large resources companies to follow suit quickly while agricultural stock are relatively cheap compared with their lofty prices during June of 2008.

Find below a list of agricultural stocks which produce potash that could be in play for takeover.

Mosaic Co. (NYSE: MOS) closed at $57.88 on Wednesday. Mosaic is the second largest producer of potash and largest producer of phosphate products. The stock closed as high as $161.08 on June 17, 2008, and closed as low as $22.31 on November 20, 2008. MOS’s forward P/E is 14.54. PEG ratio is 1.94. Quarterly revenue growth rate is 16.70%. Insiders hold 64.41% of total shares outstanding. Institutions hold 27.90% of the remaining float. MOS pays a 0.40% dividend. MOS’s market cap is $25.78 billion.

Agrium Inc. (NYSE: AGU) closed at $69.87 on Wednesday. AGU’s forward P/E is 12.28 and PEG ratio of 2.88. AGU had reached a high closing price on June 23, 2008 of $112.45 and a low price on November 20, 2008 of $23.31. Insiders hold only 0.15%, but institutions hold 70.30% of the total float. AGU has a quarterly revenue growth rate of 6.80%. AGU pays a 0.20% dividend. AGU’s market cap is $10.97 billion.

Intrepid Potash Inc. (NYSE: IPI) closed at $25.08 on Wednesday. IPI’s forward P/E is 19.90 and PEG ratio of 27.35. IPI had reached a high closing price on June 23, 2008 of $73.23. Insiders hold 39.37%, while institutions hold 64.20% of the total float. IPI has a quarterly revenue growth rate of -16.00%. IPI pays no dividend. IPI’s market cap is $1.88 billion.

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About BeaconEquity.com

BeaconEquity.com is committed to producing the highest-quality insight and analysis of small-cap stocks, emerging technology stocks, hot penny stocks and helping investors make informed decisions. Our focus is primarily OTC stocks in the stock market today, which have traditionally been shunned by Wall Street. We have particular expertise with renewable energy stocks, biotech stocks, oil stocks, green energy stocks and internet stocks. There are many hot penny stock opportunities present in the OTC market everyday and we seek to exploit these hot stock gains for our members before the average daytrader is aware of them.

Beacon Equity Group Disclaimer

This newsletter is a paid advertisement and is neither an offer nor recommendation to buy or sell any security. We hold no investment licenses and are thus neither licensed nor qualified to provide investment advice. The content in this report or email is not provided to any individual with a view toward their individual circumstances. Beaconequity.com is a wholly-owned subsidiary of BlueWave Advisors.

While all information is believed to be reliable, it is not guaranteed by us to be accurate. Individuals should assume that all information contained in our newsletter is not trustworthy unless verified by their own independent research. Also, because events and circumstances frequently do not occur as expected, there will likely be differences between the any predictions and actual results. Always consult a real licensed investment professional before making any investment decision. Be extremely careful, investing in securities carries a high degree of risk; you may likely lose some or all of the investment.

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