Most observers seem to agree that the potash market is going to get
better as the year progresses, but just how much better is the $64,000
question for Potash Corp (POT) and investors in competitors like Mosaic (MOS) or Intrepid Potash (IPI).
Nobody's talking about another repeat of 2009, but the market continues
to play a game of chicken with shipment numbers and second-half
restocking assumptions.
Read the full piece here:
Summer Can't Come Fast Enough For Potash Corp.
Showing posts with label Intrepid Potash. Show all posts
Showing posts with label Intrepid Potash. Show all posts
Thursday, April 26, 2012
Friday, January 6, 2012
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.
Monday, January 10, 2011
Investopedia: Mosaic's Opportunities Still Look Fertile
Mosaic (NYSE:MOS), one of the largest fertilizer companies in the world, has already enjoyed a solid run of late, as the shares have doubled from late June. But with crop prices still very high, fertilizer inventories running low and an industry operating at a high level of capacity utilization, it may not be too late to make money off of another bull cycle in crop nutrition.
The Quarter That Was
Mosaic reported a fiscal second quarter performance that was comfortably ahead of analyst expectations. Revenue jumped 56% in the period, though the inner workings were a bit confusing. Phosphate sales jumped 49% on a 10% increase in shipments (in metric tons) and a better-than-60% spike in average realized prices. The potash segment delivered even better growth (up 69%), as shipments jumped 75% but average selling prices fell about 11%. On a gross profit basis, both units were much better - phosphate gross profits rose 321%, while potash was up 59% and overall company-wide gross profit rose 150%.
Looking Towards a Tighter Market
Mosaic's CEO was rather optimistic about the outlook for 2011, talking about a potentially "outstanding" year to come. There's plenty of reason to buy into that. Crops prices are still quite high, and high prices have the tendency to encourage more planting. Elsewhere, inventory stocks of fertilizers are rather low. Going a step further, it looks like the major producers [including Potash (NYSE:POT), BHP Billiton (NYSE:BHP), Agrium (NYSE:AGU), Intrepid Potash (NYSE:IPI), and Yara (Nasdaq:YARIY)] are going to be running somewhere in the high-eighties to low-nineties as a percent of capacity - a level of production that suggests that any missteps or outages could lead to a spike in prices. (For more, see 5 Agriculture Stocks To Grow With.)
All in all, then, it looks like a year where demand will be strong and supply will be tight. Given that Potash, Mosaic, Vale (Nasdaq:VALE) and BHP control a lot of the new brownfield expansion opportunities, it seems reasonable that they will not crush their own market by bringing on too much capacity too quickly. Moreover, junior potash companies like Allana Mining, IC Potash, and Western Potash are many years away from production and cannot influence current supply.
Please click the link to continue:
http://stocks.investopedia.
The Quarter That Was
Mosaic reported a fiscal second quarter performance that was comfortably ahead of analyst expectations. Revenue jumped 56% in the period, though the inner workings were a bit confusing. Phosphate sales jumped 49% on a 10% increase in shipments (in metric tons) and a better-than-60% spike in average realized prices. The potash segment delivered even better growth (up 69%), as shipments jumped 75% but average selling prices fell about 11%. On a gross profit basis, both units were much better - phosphate gross profits rose 321%, while potash was up 59% and overall company-wide gross profit rose 150%.
Looking Towards a Tighter Market
Mosaic's CEO was rather optimistic about the outlook for 2011, talking about a potentially "outstanding" year to come. There's plenty of reason to buy into that. Crops prices are still quite high, and high prices have the tendency to encourage more planting. Elsewhere, inventory stocks of fertilizers are rather low. Going a step further, it looks like the major producers [including Potash (NYSE:POT), BHP Billiton (NYSE:BHP), Agrium (NYSE:AGU), Intrepid Potash (NYSE:IPI), and Yara (Nasdaq:YARIY)] are going to be running somewhere in the high-eighties to low-nineties as a percent of capacity - a level of production that suggests that any missteps or outages could lead to a spike in prices. (For more, see 5 Agriculture Stocks To Grow With.)
All in all, then, it looks like a year where demand will be strong and supply will be tight. Given that Potash, Mosaic, Vale (Nasdaq:VALE) and BHP control a lot of the new brownfield expansion opportunities, it seems reasonable that they will not crush their own market by bringing on too much capacity too quickly. Moreover, junior potash companies like Allana Mining, IC Potash, and Western Potash are many years away from production and cannot influence current supply.
Please click the link to continue:
http://stocks.investopedia.
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