Agrium Incorporated

Agrium Inc. (AGU - Analyst Report), the agriculture and fertilizer company, has traded sharply lower since we last reviewed it on Sep 11. Last week's downturn was the result of a sell-off in the commodities-related stocks as well as an earnings miss by competitor Mosaic (MOS - Snapshot Report).

What does this mean for Agrium?

Agrium has three business segments: fertilizers, the retail segment, which sells seeds and fertilizers to farmers, and the advanced technologies segment.

It is Agrium's fertilizer segment that has come under fire after Mosaic's earnings. Mosaic said it was reducing its phosphate production due to rising inventory but the company believes phosphate fundamentals remain positive and that demand is expected to rebound once inventory levels are normalized.

As we wrote on Sep 11, the strike at Potash of Saskatchewan (POT - Analyst Report) is severely impeding potash inventory levels. Potash supply was at record low levels in August and Mosaic said strong global demand continues.

Until the Potash strike is settled, Potash prices should remain extremely elevated. This is a positive for Agrium.

Agrium's CFO talked to Reuters last week after the stock plunged.

"I think it's just a lot of panic in the market right now and the market is very, very skittish, and any hint of even a possibility of bad news seems to generate a huge overreaction," said CFO Bruce Waterman.

"What it really comes down to is no individual company can stand up to a tidal wave of panic selling," he said.

Value Fundamentals Intact

Agrium remains a Zacks #1 Rank (Strong Buy) but one analyst cut full year estimates in the last 30 days. However, consensus estimates remain higher for the third quarter and the full year in the last month.

Because of the sell-off, Agrium is cheap. Its forward P/E is now only 3.51. However, we won't get a clearer picture on the underlying business until Agrium reports third quarter earnings on Nov 6. Until then, the fertilizer sector could continue to be rocky for investors.

Read the Sep 11 analysis.

Update to Previous Value Zacks Rank Buy Stocks

Collective Brands Inc. (PSS - Snapshot Report), a national shoe retailer that is the largest non-athletic footwear company in the Western Hemisphere, is successfully selling shoes despite the economic downturn as it focuses on designer brands. Collective Brands has a forward P/E of 12.87. Read the Sep 30 analysis.

Shanda Interactive Entertainment Limited (SNDA), a Chinese-based media company that offers online gaming, has surprised on estimates 4 consecutive quarters by an average of 13.45%. Shanda trades at only 9.7x projected earnings. Read the Oct 1 analysis.

Fossil, Inc. (FOSL - Analyst Report) designs fashion accessories, including handbags and watches. The company continues to see strong watch sales despite the challenging retail environment. It has surprised on earnings 4 consecutive quarters by an average of 38.46%. Fossil is trading at 10.9x forward earnings. Read the Oct 2 analysis.

ONEOK Partners Limited (OKS - Analyst Report) is one of the largest natural gas limited partnerships in the U.S. The partnership recently raised its distribution for the 10th consecutive quarter. It has a forward P/E of 9.87. Read the Oct 3 analysis.

Read the full analyst report on OKS

Read the full analyst report on FOSL

Read the full analyst report on SNDA

Read the full analyst report on PSS

Read the full analyst report on POT

Read the full analyst report on AGU

Read the full analyst report on MOS