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Agriculture stocks are flying below the radar. Is it time to buy? Agrium Inc. (AGU - Analyst Report) posted a record 2011 as agriculture fundamentals remained strong. Yet this Zacks #1 Rank (Strong Buy) is trading with a forward P/E of just 9.1.

Agrium is among the largest direct-to-grower agricultural retailers in North and South America.

Headquartered in Calgary, Canada, it also produces all three of the major fertilizers, nitrogen, phosphates and potash, as well as micronutrients and plant protection products.

A Record Q4 and 2011

On Feb 8, Agrium reported its fourth quarter and full year results and beat the Zacks Consensus Estimate by 34 cents. Earnings per share were $2.34 compared to the consensus of $2.00. This was a 110% increase from the fourth quarter of 2010 when the company made just 97 cents.

Sales climbed 32% to $3.2 billion from $2.4 billion a year ago. Retail was a big winner in the quarter as sales jumped to $1.8 billion from $1.3 billion due to the addition of the Landmark Australia Retail business, strong price appreciation for nutrients and increased demand for other crop input products and services in the fall season.

Crop protection sales rose 38% to $403 million from $292 million last year and seed sales were up 54% to $83 million. Sales of its private label Dynagro seed doubled over the past year.

What About 2012?

In February, Agrium expected agriculture fundamentals to remain strong in 2012. Inventory levels for most crops remained well below normal levels which meant that farmers had an incentive to plant record acreage for the spring planting season.

That would mean further demand for its crop input products and services.

2012 Zacks Consensus Estimates Move Higher

The analysts are turning more bullish on Agrium as the first quarter earnings report approaches.

3 estimates have moved higher for the full year in the last 30 days pushing up the Zacks Consensus Estimate to $9.26 from $9.13 in the last 30 days.

That's a 5.3% decline from 2011's earnings of $9.78 but that was a record year.

Agrium Is Cheap

Like a lot of stocks, Agrium shares have rallied in 2012 but that hasn't stopped it from still being a cheap stock.

Its P/E of 9.1 is below that of many of its peers in the fertilizer area including Potash (POT) which trades at 11.6x and Mosaic (MOS) at 11.5.

Agrium also has other metrics which indicate value including a price-to-sales ratio of 0.9. A P/S ratio under 1.0 can mean a company is undervalued.

The company also has a cheap price-to-book ratio of just 2.1. A P/B ratio under 3.0 usually means "value."

Additionally, Agrium has other strong fundamentals including a 1-year return on equity (ROE) of 25.7%.

It also pays a dividend currently yielding 0.5%, but the dividend is just an added bonus.

For investors looking for a way to get in on the increasing demand for food from an emerging global middle class, Agrium is an attractive value.

The company is scheduled to report its first quarter results on May 9 which should provide a look into how 2012 is shaping up.

Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the Turnaround Trader and Insider Trader services. You can follow her on twitter at @TraceyRyniec.

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