Agrium, Inc. (NYSE: AGU - News) shot up by 6.2% to trade at $78.78, veering close to its 200-day Moving Average of $79.06. Although a sell-off in commodities has severely punished the stock since June, AGU has sprung earnings positives in three of the last four quarters, driven by rising fertilizer prices globally. Agrium's second-quarter profit swelled to a record $636 million while net sales surged by 90%.
Currently, the stock is in the value territory with a forward multiple of only 5.82. Taking into account the company's solid fundamentals and results, analysts have revised their guidance on the stock's earnings estimate for the year by $2 over the last three months. This view found support from AGU CEO Mike Wilson, who in an interview to Bloomberg, revealed that he has increased his stake in the company by 13% to cash in on the rising global demand for grains and agriculture products.
This comes in the wake of the company's announcement of the issue and sell of $500-million aggregate principal amount of 6.75% debentures due January 15, 2019. The proceeds will be used to repay the borrowing made to fund the acquisition of UAP Holding Corp.
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