Agrium Inc. (NYSE:AGU) (TSE:AGU) is certainly not a stock that seems sexy or exciting to investors, but, according to JANA Partners LLC founder, Barry Rosenstein, it may offer them something better, outsized returns. The agricultural nutrients manufacturer was the main subject of a presentation, given by the investor today at the 8th annual Value Investing Conference.
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According to Rosenstein, Agrium Inc. (NYSE:AGU) (TSE:AGU) has been systematically undervalued for some years. Despite performing well on an absolute basis, but has failed to live up to its potential when weighted against its peers. JANA believes there is a great deal of value that can be gained in the company and transferred to shareholders.
The company has been fundamentally mismanaged, according to the assessment from JANA. Agrium Inc. (NYSE:AGU) (TSE:AGU) has failed to keep costs in control on the retail side of its business, and so, has allowed itself to earn less than it had the potential for in that, a major component of its business.
The investor also argued that the company’s board had been attempting to dodge the problems facing it, and called on the firm to put an end to so called “diversionary tactics”.
Agrium may well have a great deal of value that is hidden from its shareholders, but a board slow to act on improving the situation will attract only investors willing to take risks and sit on shares for quite a while.
In light of this, Agrium shares fell slightly today, and continued to drop by a small amount in after market trading. Shares of the firm currently stand at $105.36.
If Agrium Inc. (NYSE:AGU) (TSE:AGU) and its rumored hidden value have piqued your interest, you can find the full presentation given by Mr. Rosenstein below.
Jana Rosenstein ValueInvestingCongress 100112