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Big Movers You Need To Know For April 18

Posted: Apr 18, 2008 14:37 PM by Ayton MacEachern

Tickers in this Article: AGU, UAPH, BGG, PBR, XOM, VLO, LEH

The Bull Pen
North American fertilizer giant Agrium (NYSE:AGU) posted gains of more than 20% this week on news that China has agreed to pay more than double for Canadian fertilizer. The news comes after a contract was made between the Export Association of Saskatchewan Potash Producers and China's Sinofert which called for a shipment of 1 million metric tons of potash at a $400-per-ton premium over 2007 prices.

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Large gains were seen this week in fertilizer stocks across the agricultural sector, as food demand and commodity prices continue to soar. Along with the negotiated price increase on China's fertilizer imports, China placed tariffs on its fertilizer exports Thursday. What this means for North American fertilizer companies is that imports from China will decrease, creating an increase of demand on local companies such as Agrium.

Going forward, I am watching for the proposed merger of Agrium with UAP Holding Corp. (Nasdaq:UAPH). This is a move that as Stock Picking Community member "ktxmatrix" says will make Agrium "North America's largest agricultural retailer". (For related reading, check out Taking Global Macro Trends To The Bank.)

Beary Picking
Shares of Briggs & Stratton (NYSE:BGG) have fallen more than 20% since last Friday's close, with a 14% plunge on Thursday due to missed expectations in its Q3 earnings call, and lowering its outlook for the year going forward.

It has been a hard year so far for the engine producer, with stock prices declining from a recent high of almost $25 a few days before the start of 2008 to now trade in the $15 range. Although its quarterly earnings of 75 cents per share on sales of $725 million were up from 18 cents per share on sales of $717 million for the same period last year, analysts were expecting 85 cents per share.

Briggs & Stratton lowered its outlook to project earnings of 60-71 cents per share for fiscal 2008. This is much lower than the analysts' expectations of $1.19 per share, so I do not expect to see this one bounce back anytime soon.

Bull and Bear Watchlist
Bullish List - The Stock Picking Community is currently most bullish on Brazilian oil giant Petroleo Brasileiro (NYSE:PBR). Petrobras has been leading Brazil stocks higher over the last few months, on news of a new oil discovery in the Santos basin. This discovery is on top of Petrobras' Tupi field discovery last year that is expected to produce to eight million barrels of oil - one of the largest finds in 20 years.

This company has a lot of money to spend, and it's spending it on the right thing - expansion. A company director announced on Tuesday that Petrobras is resuming talks to buy a refinery in Aruba owned by Valero Energy (NYSE:VLO). This follows other major moves including a recent purchase of a refinery in Japan, a bid on ExxonMobil's (NYSE:XOM) Esso branded service stations in Brazil, and upgrades its refinery in Pasadena, Texas. Community member "schrodervictor" believes the stock will rise because of "the huge oil reserves found [in] the deep sea of Brazil", but warns us that it will take a long time to explore. (To learn more, check out The Advantages Of Investing In Aggressive Companies.)

Bearish List - Lehman Brothers (NYSE:LEH) has topped the most bearish list in the Stock Picking Community for a few weeks now with 60% of the members providing stock picks with a bearish outlook. Community member "trfichter" believes all investment banks are in trouble and says, "The Fed lowering interest rates again only prolongs the agony."

Lehman Brothers has been having a hard time since February, when it traded at a high for the year of $66 per share; it's now in the $45 range. In an attempt to get some more cash on it's books, Lehman Brothers sold $2.5 billion in 10-year notes yielding 3.2% over U.S Treasuries on Thursday, and the stock moved up over 4.5% during regular trading to close above $43 on this news. Lehman Brothers closed up another 5.5% during regular trading on Friday, finishing the trading week at over $46 per share.

Add Your Two Cents
What do you think will happen with Lehman Brothers going forward? Will the Fed's loans collateralized on bad debt be enough to solve its cash flow, and liquidity shortage? Be sure to join me (aytonmm) in the FREE Stock Picking Community to share your thoughts and see what other investors are saying.

By Ayton MacEachern

Ayton MacEachern is an Equity Trader, previously working as the Senior Financial Editor at Investopedia.com. After receiving his bachelor's degree in financial services from Mount Royal College in Calgary, Alberta, MacEachern began his career at an international securities trading firm. MacEachern has worked in a variety of roles in the financial industry, including workers' compensation insurance underwriting, financial planning, and equity, currency and options trading. MacEachern is also Co-Founder of theskipper.ca, a source for online outdoor education.

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