Earlier this month, UAPH committed the cardinal sin of disappointing analysts, who dislike nothing more than being made to look foolish.
They, and not UAPH, had been forecasting earnings of $1.47 cents a share for 2007. Instead, while posting higher first quarter profits, the company said it expects earnings of between $1.25 and $1.40 a share, and UAPH's shares promptly slumped by over 10%.
But while those all around him were sulking, Merrill Lynch analyst Steve Byrne, though lowering his 07 estimate, said the shares could gain in the coming months, driven by a rebound in demand for fertilizer this fall. The outlook for expanding U.S. corn acreage is favorable for UAPH, as corn accounts for a disproportionately large amount of U.S. demand for fertilizers, seeds and crop production chemicals.
Byrne maintained his Buy rating for UAPH with a $25 price target. Insider moves recommends following his advice, as did one of the company's key directors, Carl Rickertsen, who last week spent $221,820 of his own money buying 12,000 shares at $18.48 each.
UAPH 1-yr chart: