Saturday, January 26, 2013

Agrium (AGU) - Not So Fertile Ground Any More

This past week, I sold the my remaining position in Agrium @ $110/share. Agrium, reminds me of one of my favorite John Templeton ( the Godfather of global value investing ) quotes, it goes like this:

                       "stocks are rarely popular and cheap at the same time"

While AGU could move a little higher, there's no way to know exactly where the "top" is - to the penny. It's currently trading at a market capitalization of $17B and 13.5X earnings and 2.5X book value. Agrium is popular.

On another note,

My recent portfolio sales and the cash from the Nexen arbitrage deal, have raised my current cash level to 14%. I wrote recently that the market has come far quite quickly ( S&P 500 up 5% already in 2013) - caution is warranted. I'll be ready to deploy cash when the market turns fearful.

Chart forAgrium Inc. (AGU.TO)

Thursday, January 17, 2013

5 Year Highs, Now What?

The S&P 500 touched an intra-day 5 year high today. It's time to proceed with caution. That doesn't mean I've turned bearish, but it means it's time to pay extra attention to prices paid - when buying new stocks. It's also prudent to review your holdings and lighten up on companies that are close to or at their intrinsic value (IV). There will be better days (market pull backs) ahead to pick away at companies you like - it's good to have some cash around. In fact, I think 2013 will probably surprise most people, on the upside, but the volatility will be noteworthy. Volatility is opportunity. You want to be invested, but in the cheap areas of the market. That being said:

I have very recently sold my remaining position in tax preparer H&R Block (HRB) @ 20.30, which I bought in 2010 at $12.30. I have also sold 50% of my position in Agrium (AGU) @ $106.60, which I bought in 2009 at $47.

The plan for 2013 like any other year, is to buy cheap stocks and sell the expensive ones - sounds complicated eh? There's value in U.S. financials (banks and insurance), large cap technology companies, auto parts/car makers, healthcare and natural gas.

All the best in 2013.

Andre