RE: a great company but -Sorry to hear you got caught in the price chart in your decision making.I have spent the last 4 days and nights analyzing what April 2, 2007 announcement does to earnings over the next 2 to 3 years.
You clearly had vision in picking up the stock at $ 2.70 which is excellent (I was also bottom feeding at similar price ranges but in scale of 15 times our original position) but I don't understand how you could think the stock is at full value or overvalued for the long term if you truly analyzed what the cash flows and barrier to entry that has been created into China by HF, PetroCHina and Agrium.
But I do thank you for selling this week as I was pleased to pick up shares because sellers create liquidity and a entry point for those who see things much differently.
I know what the business is going to look like in the next 2 to 3 years which is exceptional for HF but let's just talk about the cheer leading events that are going to happen by the large brokerage firms who currently follow Agrium in the United States & Canada - See the list below:
UNITED STATES:
Company Name Phone Number
Greenwich Consultants Michael Judd 732-842-0700
Goldman Sachs Edlain Rodriguez 212-357-4318
Bank of America Marshall Reid 212-847-5651
Credit Suisse First Boston Mark Connelly 212-325-5844
JP Morgan Securities David Silver 212-622-6718
Merrill Lynch & Company Donald D. Carson 212-449-9159
CANADA:
Company Name Phone Number
UBS Securities Canada Inc. Brian MacArthur 416-350-2229
TSO and Associates Terry Ortslan 514-844-8344
Scotia Capital Sam Kanes 416-863-7798
Salman Partners Ray Goldie 416-214-2749
RBC Captial Markets (Canada) Fai Lee 604-257-7662
Odlum Brown Limited Murray Leith 604-844-5368
CIBC World Markets Jacob Bout 416-956-6766
BMO Nesbitt Burns Edwin Chee 406-359-6193
Anyone who knows anything about valuing a company's price requires the analyst's to calculate "what is the expected discounted cash flows over a series years into the future". Well that is exactly what 14 analysts are frantically doing this on Agrium to determine what they feel is FMV for the stock of Agrium.
But in order for the Analysts to derive FMV for Agrium they need to know what is the expected cashflows associated with its 19.60 % common share ownership in HF plus what will be the cash flow impact to Agrium when its exercises its 50 % buy in option of SCU Holdco as part of the Joint Venture between HF, Agrium and Petro China. I have done my cash flows and what it will look like over the next 3 years is hard to comprehend as the revenue, earnings and cashflow for HF will simpley explode in size.
The point I am trying to make here is the analysts will be doing a deep dive understanding of HF becasue of Agriuem's material ownerhip in HF now. Once the analyst uncover what is going to happen with the business growth they will have no choice (assuming the analyst has any idea in what he/she is doing) but to place a strong buy recommendations on HF with 12 to 24 month target in the range of $12 to $20.00.
You must know that up until only the visionary smaller brokerage firms firms (In relation to the ones mentioned above)in Canada have recommended HF for about two years now. Such as Jennings capital - John Duncanson, Research Capital John Chou, Paradigm David Davidson, GMP sorry don't remember the analyst name.
Over the next two months the sucking sound of the big boys (14 firms) listed above will be going insane trying to buy HF for their client accounts retail/Insitutional. The only problem they are going to find is the stock is not widely held as no one who has vision is going to sell below $ 20.00 unless they (like you did this week) just keep looking at the stock chart rather than the financial satements growth which the Buffet/Munger types know the stock price is for liquidity events not business valuations in the short term.
I am not selling this week rather buying aggressively in advance of the 14 institutions which will be placing HF on its strong buy list in the next few months. I Prefer to buy more at $ 9.80 versus $15.00 once the big boys come piling in for shares.
One thing I know for sure is the next 24 to 36 months will be interesting to watch as the business continues to execl and the herd follows in to buy the stock.
Glad to be long on HF.