Seeking Alpha: Yara International Continues To Execute Well In A Turbulent Market

A year ago I wasn't sure what to make of Norwegian fertilizer giant Yara International (OTCPK:YARIY), as I was bullish on the company's overall business model and long-term prospects but thought that the shares adequately reflected a lot of the upside. The local shares (YAR.OL) have climbed about 20% over the last year, but the ADRs are down about 5% due the appreciation of the dollar (Eurozone investors would be looking at a roughly 13% gain).

Assuming that the currency rate settles down, the prospects for Yara's ADRs are neutral-to-positive in my view. While increasing Chinese coal-based exports are a concern, Yara's strategy of shifting more business toward higher-value products should offset this. At the same time, while the company saw some very unwelcome C-suite turbulence last year the company has continued to identify attractive capital investment prospects that should build more value in the years to come. I think $48.50 to $55 is a good range in which to think about Yara's value, but that doesn't lead to the most compelling investment argument today.

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Yara International Continues To Execute Well In A Turbulent Market

Seeking Alpha: Yara International Offers A Tricky Balance Of Quality And Value

There's more to Yara International (OTCPK:YARIY) than run-of-the-mill commodity fertilizers, but I have to wonder whether the market is already sufficiently pricing in the advantages of the company's increasing leverage to value-added and specialty products. The ADRs have been quite strong over the past year (up about 29%) while most fertilizer stocks have lagged the market, and up almost 20% over the past three months despite very weak urea prices. I don't want to undersell the company's ability to leverage lower input costs and premiums for its nitrate and NK sales, but the valuation already appears to factor in a pretty healthy recovery from this trough.

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Yara International Offers A Tricky Balance Of Quality And Value

Investopedia: Yara Built To Last, But Looking At A Downturn In The Cycle

Norway's Yara International (Nasdaq:YARIY) is no run-of-the-mill commodity company. Not only is the largest supplier of mineral fertilizers in the world, holding 9% share of the global nitrogen fertilizers market, but Yara has a rare record of consistent double-digit returns on capital and assets.

While the quality of the company's assets, the benefits of nitrogen fertilizers, and the discipline of management speak well to the company's future, a surge in Chinese exports and energy costs is squeezing the company's profitability. Making matters worse, it's likely to get uglier from here, as the company could be looking at EBITDA bottoming out in the 2014/2015 timeframe. Although Yara is a little undervalued today and is likely to continuing paying a healthy dividend through the lows of the cycle, holding commodity stocks through the bottom of the cycle can be painful for shareholders.

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http://www.investopedia.com/stock-analysis/071513/yara-built-last-looking-downturn-cycle-yariy-agu-cf-pot-mos.aspx

Investopedia: Can Investors Grow Wealth With Mosaic?

Farming is an up-and-down business, and so too are the businesses for farming inputs like equipment and fertilizer. In the case of Mosaic (NYSE:MOS), investors have been trying to digest the news of production cuts across the sector and weighing that against what looks like a pretty healthy North American planting season. Although volatility means this is a poor candidate for long-term buy-and-hold investors, today's valuation on Mosaic makes it worth a look from investors seeking shorter-duration trading opportunities.


A Decent Fiscal Second Quarter
In many cases, Wall Street doesn't care much about what fertilizer companies like Mosaic or Potash (NYSE:POT) report for earnings, as so much attention is given to forward-looking comments on volume and pricing. Nevertheless, Mosaic did alright this time around. (For related reading, see 2011 Look Back At Agriculture.)

Read the full piece here:
http://stocks.investopedia.com/stock-analysis/2012/Can-Investors-Grow-Wealth-With-Mosaic-MOS-POT-DD-DE-IPI0106.aspx

Potash and BHP Billiton - Is This The Start Of The Next Leg Up?

The ag sector has been roiling ever since Potash (NYSE: POT) went public to scorn an unsolicited bid from global resources giant BHP Billiton (NYSE: BHP). The deal would have given Potash shareholders $130 per share in cash for their stakes in this leading fertilizer company, and it would have cost nearly $40 billion for the would-be Australian acquirer. 

This battle is not over by a long shot, and it is fair to wonder whether this move really does confirm the next big move in the ag sector.

They Doth Protest Too Much
Of course, it was not enough for Potash to simply reject BHP politely and discreetly. Oh no - Potash management felt the need to fire off a broadside full of the sort of hyperbole that long-term investors have probably come to expect in these deals. Potash management essentially called the bid opportunistic and said that it failed to appreciate the company's "dynamic growth prospects". Given that Potash is a commodity company and prone to extreme cyclicality, that calls into question just precisely how the CEO defines "dynamic growth prospects". 


To read the full piece, please continue on to:
http://stocks.investopedia.com/stock-analysis/2010/Potash-And-BHP-Billiton---Is-This-The-Start-Of-The-Next-Leg-Up-POT-BHP-CF-MOS-AGU-VALE0819.aspx