Dykstra: Winning Formula

There are so many more positive things I want to say about this rock-solid company, but if I did, my editor would have to cut me off. I'll close with this: How does $5.33 billion in revenue, or almost $100 in revenue on a per-share basis, nearly $3.50 a share in cash and a debt-to-equity ratio of 0.1 sound?

For me, that puts the "b" in buy!

My other recommendation today is Agrium (AGU Quote). A Canadian global producer and marketer of agricultural nutrients and industrial products, Agrium had $2.8 billion in sales in 2004 and is projected to have sales over $3.2 billion in 2005.

The company's retail unit sells agricultural products and a variety of services to its mainly agricultural customers, including fertilizers, crop-protection chemicals and seed. Agrium's wholesale operation manufactures, markets and distributes nitrogen, phosphate and potash. Don't forget that food is not the only the only thing that fertilizer produces these days; it is also converted into energy.

With a forward P/E of 11.3, return on equity of over 32%, and a debt-to-equity ratio of 0.5, this company's stock has the exact type of profile I'm looking for. At a price-to-sales multiple of under 0.9, the stock is much too cheap to resist at current levels.

As with Jacobs Engineering, Agrium reports earnings on Thursday, a day that is shaping up to be a "make or break" session for this week's picks.

As for last week's picks, Cabot Oil & Gas (COG Quote) rallied sharply in anticipation of its strong quarterly results last Thursday. The stock opened at $43.40 last Monday, hit an intraday high of $49.72 Wednesday and closed Friday at $46.41, up 6.9% for the week.

Mattel (MAT Quote), meanwhile, slid 2.1% but the growth by acquisition strategy I laid out remains very much intact. I bought 1,000 shares at $14.55 on Oct. 27. I had a standing good till cancel (GTC) "limit order" in my trading account. Notice the word "limit." Don't ever put in a GTC order at the market. Those operators on Wall St. will cut you up and make you like it!