FMC Corp.: Jim Cramer’s Hidden Agriculture Trade (FMC)

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On tonight’s MAD MONEY on CNBC, Jim Cramer wanted to review a hidden undervalued stock in  the market.  Tonight he noted FMC Corp (NYSE: FMC) as a key undervalued stock in chemicals and agriculture.  While he likes the company on its own, he noted that the current inflated prices in Agriculture and potash stocks should actually generate a much higher stock price.  He thinks that because of this company’s pricing power in its its niche that this should be worth a combined $5.7 Billion instead of $4+ Billion today.  In his words, that yields a $70 STOCK.

By now you have seen this sector on fire.  We just noted a hot potash IPO coming soon and just yesterday we noted how the best post-IPO in recent months is also in the sector.  Deere (NYSE: DE) shares indicated lower after earnings this morning and closed lower too.

Just remember one key thing.  Thursday is Valentine’s Day, and fertilizer is only a good gift if your intimate other is a green thumb that hasn’t been able to get to the store in a very long time.

FMC closed up 2.2% at $53.54 today and the 52-week trading range is $35.64 to $59.00.  $70.00 would be a considerable price.  While it still is listed as having a 30+ P/E ratio, this really trades with a 13.8 P/E ratio for fiscal Dec-2008 forward estimates.

Jon C. Ogg
February 13, 2008