The premarket indication is for US$ 152.39, with the exchange at 95.68 the Canadian equivalent is C$159.27, not far from the suggested $160.
The latest argument for a higher price according to the company itself, is that each year 75 million new people need to be fed and presumable they are the enablers.
We have not commented much on POT, other than to say that it is a rather high Beta-stock and very sensitive to China’s wellbeing. However, we did recommend selling AGU at about $72, after which it dropped to about $52. After that both stocks went off the radar screen and now that 3/4 of a year has gone by we have this bid for POT; so, if you happen to own it the question now is how high can it go? By the way AGU has not yet returned to the $72 price level! Here is the POT chart. (looks a lot like MFC !)
It is worth remembering that this stock was at $246 in 2008 and then dropped to $61, or about 74%. The subsequent rebound, after a swift move up, has been anemic for the last year and a half and it took the 40 billion offer to get prices to $152 or $22 above the bid. So,using EW what is a logical value? $154 is a 50% and $175 a 62% retracement, chances are the stock will trade within that range, probable at the lower end where C=A. A 4th and 5th wave are still needed to complete the pattern (the gap having occurred in the 3d wave of C.
Theoretically, using a discount rate of 0% and assuming that Malthus was right after all, albeit off by a mere 210 years and invoking the famous ceteris paribus by assuming the mathematical impossibility that China will continue to grow at 10% forever, the stock is worth an infinite amount, which is what the market seems to be banking on. The rumor is that another suitor is lurking in the bush even though it is not readily apparent who that might be as there are few companies that have the clout to take so much hay on their fork (China itself , maybe??). Buy on rumor and sell on fact, at $160 +
AGU and also POT and MOS with it have continued to drop and at least as far as Agrium is concerned the outlook does not look good. The stock dropped below the $61 level and this is a sure fire indication that the a-b-c perfectly symmetrical correction is over. The overlap with previous high points argues that the stock will go further down, most likely to new lows. See previous comments.
Mosaic has already overlapped and was not able to retrace to the 50%+ level at all and therefore looks even more fragile. Potash (not shown) is somewhere in between but also a sell.
