Consolidation in Ags

First CF offers to buy TRA in a stock swap merger. TRA rejects. Now AGU is offering to buy CF at a 30% premium.

Agriculture Earnings Update

TRA

EPS: .66 vs .64 expected
Revenue: 570 vs 539 expected
Reaction -5%



TRA is standing at its 100 DMA. With a weaker market this stock can take a huge hit. I would short some now, short more when it break the 38 level.

SYT

Profit: US$1.11 billion vs US$1 billion expected.
Revenue: US$9.24 billion
Reaction: -.5%



SYT is also close to the 100 DMA. It is forming a h&s formation. However, the reaction to earnings was not that bad. This stock will need to break the 100 DMA at around 47 to be shortable.

BG

EPS: 1.82 vs 1.54 expected
Revenue: 14 billion vs 11.8 billion expected
Reaction: -9%



The stock is right at the 100 DMA like the other two. With a huge downward reaction today, this stock seems to have the most potential to be shorted. Potential support exists at 102.

Agriculture Earnings

There are 4 agriculture stocks releasing earnings this Thursday. I want to take a look at them.

UPDATE: I guess AGU isn't really reporting earnings on Thursday. The best estimate I have is from earnings.com 7-Feb-08 - 14-Feb-08

AGU
Agrium - produces and markets agricultural nutrients, industrial products, and specialty fertilizers worldwide, as well as involves in the retail supply of agricultural products and services in North and South Americas.

PE: 40
2007 PE: 21.2
2008 PE: 14.11

EPS estimate: 0.87, vs -0.47 last year
Revenue estimate: 1220.23 vs 899.0 last year

Wow, look at that expected growth. Also, almost all the analysts following it have an outperform rating on it. Now lets look at the chart.



Unfortunately, it is not close to any support, but I suppose that does not matter with an earnings release. The only significant thing I see is a possible head and shoulder formation that would complete with a sell off after earnings.

TRA
Terra Industries - engages in the production and marketing of nitrogen and methanol products for agricultural and industrial markets in the United States, Canada, and the United Kingdom.
engages in the production and marketing of nitrogen and methanol products for agricultural and industrial markets in the United States, Canada, and the United Kingdom.

PE: 32
2007 PE: 17.8
2008 PE: 10.66

EPS Estimate: 0.64 vs 0.1 last year
Revenue Estimate: 539.0 vs 450.0 last year

I am not sure if the revenue estimate is accurate since it is from one analyst, but the EPS grow is phenomenal. The analyst have high ratings on this stock as well.

The chart looks very similar to AGU


SYT
Syngenta - an agribusiness company, operates in crop protection and seeds businesses. It operates in three segments: Crop Protection, Seeds, and Plant Science.

PE: 39
2007 PE: 23.6
2008 PE: 20.8

EPS Estimate: 2.26 vs -4.8 last year
Revenue Estimate: 2695.0 vs 2718.0 last year

They are based in Switzerland so they report only twice a year. I am not sure how accurate any of the numbers are since there are very few analysts covering the stock. Bear Stearns just initiated on this stock with an "Outperform" rating, however LEH, GS and UBS have neutral ratings on it.

Similar looking chart.


BG
Bunge - engages in the agriculture and food business. It operates in three segments: Agribusiness, Fertilizer, and Food Products.

PE: 20
2007 PE: 21.6
2008 PE: 18.3

EPS Estimate: 1.49 vs 2.09
Revenue Estimate: 11939.1 vs 7683.0

Thats some nice growth. Most analysts have a neutral rating on it.



The stock is very close to its 52 week high, so a bad earnings could bring it down pretty hard.