Mosaic (MOS), Potash/Saskatchewan (POT) Benefit From AGU/UAPH Deal
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Agrium's (NYSE: AGU) buyout of UAP Holdings (Nasdaq: UAPH) for $2.65 billion is boosting other farm services retailing stocks today. Specifically, companies focused on chemical manufacturing of fertilizers and other feed products, like Mosaic (NYSE: MOS) and Potash Corp./Saskatchewan (NYSE: POT), are feeling the greatest upward pressure.
One of the largest fertilizer producers in the industry, Mosaic, is up almost 7% today, reaching a new 52-week high at $74.69. As the demand for crop-protection products has gained strength over 2007, shares of Mosaic have gone up almost 250% this year from its 52-week low near $20, set in January.
With one of the highest P/E ratios (about 52x) in the industry, at first glance, it appears that much of Mosaic's growth has been priced into the stock. One the other hand, when comparing Mosaic with the largest chemical manufacturer, Monsanto Company (NYSE: MON), Mosaic looks relatively cheap. Mosaic investors are paying about 50x for EPS that are growing at about 300%, while Monsanto investors are paying about 50x for EPS that are growing at about 30%.
Besides the acquisition news, fertilizer producers are also benefiting from positive comments made Sunday by a Wall Street analyst, saying demand for fertilizer's will grow following an exploration and mining boom in Saskatchewan.
Potash Corp./Saskatchewan is up nearly 5% today, and is trading around a new 52-week high at $126.91.
One of the largest fertilizer producers in the industry, Mosaic, is up almost 7% today, reaching a new 52-week high at $74.69. As the demand for crop-protection products has gained strength over 2007, shares of Mosaic have gone up almost 250% this year from its 52-week low near $20, set in January.
With one of the highest P/E ratios (about 52x) in the industry, at first glance, it appears that much of Mosaic's growth has been priced into the stock. One the other hand, when comparing Mosaic with the largest chemical manufacturer, Monsanto Company (NYSE: MON), Mosaic looks relatively cheap. Mosaic investors are paying about 50x for EPS that are growing at about 300%, while Monsanto investors are paying about 50x for EPS that are growing at about 30%.
Besides the acquisition news, fertilizer producers are also benefiting from positive comments made Sunday by a Wall Street analyst, saying demand for fertilizer's will grow following an exploration and mining boom in Saskatchewan.
Potash Corp./Saskatchewan is up nearly 5% today, and is trading around a new 52-week high at $126.91.
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