I have to say this stock surpassed my expectations - after reviewing Interpid Potash's quarter,
I had a general target of $3 EPS for 2008 (analysts at $2.18) x 20 PE
ratio = $60 price target, when I added this stock a week ago Monday [Jun 2: Beginning Starter Position in Intrepid Potash].
I bought in the $48s and was hoping for $60 by sometime later in the
year... that would have returned 25%. Well we got this in a week and a
half, so I am booking profits and saying "wow". (I didn't get the $60,
but sold around $59)
Can it keep going up? Certainly! Low share
counts in recent IPOs allow for wild swings, but (a) I got my 6 month
target in a week and a half and (b) I prefer the valuation in Mosaic so I'll just add more exposure there if need be, as my target for Mosaic in terms of price per share is much higher.
I have brought Intrepid Potash (IPI)
back down to a very minor stake from 1.8% to 0.25%. We'll look to add
shares on a pullback, and say thank you for for this nice quick gain.
Disclosure: Long Mosaic, Intrepid Potash in fund; long Mosaic in personal account
Cutting Intrepid Potash on Quick 25% Gain 33 comments
June 12, 2008
| about: IPI
-
Font Size:
-
Print
- TweetThis
Related Articles
|
-
The Seeking Alpha 100
See allThe top 100 stock
market authors
selected for publication
Seeking Alpha 100 » -
Fastest Climbers
Authors with the largestSee all
increase in followers
in the last 7 days
Fastest Climbers » -
Top Commenters
Top commenters,See all
as ranked by their peers
Top Commenters » -
Top Instabloggers
The 100 most active
Instabloggers.-
1
David Fry
-
2
TraderMark
-
3
Don Dion
-
4
Cliff Wachtel
-
5
Mike Havrilla
Top Instabloggers » -
1
-
Top StockTalkers
TopSee all
StockTalkers.
Top StockTalkers »
This article has 33 comments:
over time much higher
in the near term if market sells off they will sell off. Generally in a market correction the strongest stocks are the last to go so thus far certain sectors (fertilizer being one) has been unaffected but if you look back at January, March 2008, August 2007 etc you see they will fall too.
If they do, it will create a magnificent buying opportunity
If you are not the trader type just hold on and come back in a year. Potash producers have some fantastic things going their way EVEN after these tremendous runs. As long as future earnings estimates continue to be ratcheted up, their is upside to go. If one is more of an avid trader, there might be lower price points to buy in the days/weeks ahead. We shall see - its more up to the market - if the market were in bull mode I'd say buy hand over fist. This is not a bull market though, and the bear eventually hits every sector.
I do have to disagree with the part that you are going to take your profits right now. This stock still has another $15-20 until the end of the year. In fact IPI right now may be better than POT and MOS even though they are at similar PE ratio b/c the company have already started mining at the 2 new acquired mines and production to begin in 2009. Additionally even though 80-90% of profits are from potash their other product langbenite price is going up. I have held a core position of about 3500 shares and buying and selling at dips and highs. I will continue to hold this stock for another 4-5 quarters (when all the potash hype goes down).
Let this be a lesson to all those investors who relies on analyst and dont do there own homework. Soleil had a price target of 40.....Goldmann sachs at 55. If you believe in a product you have to be patient and have confindence. Once i read trader marks initial article "you thought visa was hottest IPO" i did my reaserch and homework. Dont rely on professional analyst since some have a hidden vested interest.
I sencond your post. This agricultural sector is scorching HOTTTTT, and there seems to be no signs of it slowing down. Think about it....with all the floods in the midwest has been devastating to the farmers and yet the price of potash keeps rising.
Look for IPI to be at 70+ within 1-2 weeks.
Further, I am sort of interested to watch how these stocks have moved with the grains... its as if the thesis is, when grains go up so should fertilizers. Anyhow interesting move - and funny to watch them all move in a group, like a pod of whales.
Fact is they are still cheap fundamentally - which is amazing. The main problem is the overall market is prone for a correction which is the main fly in the ointment. It certainly does not appear western governments care one iota about pulling back from biofuels which was a fear of mine about 6 weeks ago, the last time these names were going nuts.
What a world.
I agree that potash prices has nothing do with midwest floods.....but i expected it to at least put a slight dampening of the agric market. Hell if cramer can move markets i just thought that a flood would also.
So what is your position. Have you re-entered your position of IPI or are you waiting for a pullback. I see maybe a pullback of about $2-3 possibly, but i dont see this stock price dropping below $60, unless if earnings release doesnt meet expectation of investors. I believe this stock will probably hit around 75 in expectations of earnings report next month.
I wasn't watching the overall action closely enough to understand that this was the right thing to happen and I'd missed the boat on that issue. So, I went into Agrium at $84.55 to see if I could pick up some scraps. Whew!! Some scraps. After loitering around for a month or so around that price, Agrium started doing the same thing as Mosaic, sometimes with even better percentages, as you all have noticed.
Let us all sink to our knees & thank the Great Green Goddess of Fertility that this fantastic run-up is taking us along on such a great ride.
Best regards,
Floridamorgan
I still have a minor stake but just rolled the funds into Mosaic which I think is more undervalued. That said IPI has the IPO factor and limited freely trading share count thing going for them. Again, the group tends to move together so it might just be a moot point which potash name you are in sometimes.
Florida,
AGU has been a laggard in the group due to the retail arm of the business but since announcing the upside in earnings has popped. I expect the same commentary from the other names and/or they will just showcase the results in another sterling earnings report (but they will have higher input costs i.e. nat gas etc)
floods wash away fertilizers-need to buy more/IPI taxes lower than Canadanian fertilizer cos - greater net income/world food commodities shortage to continue because of greater consumption and changing weather patterns worldwide etc etc
Floridamorgan,
Your completely right.....thank god for the green farming goddess. My portfolio has been good with the 2 stocks i own: Visa and Intrepid potash. These 2 companies are the google of 2008.......yeaahaaaw
edhaq$,
one positive for IPI is the weak US dollar vs Canadian producers for example.
traditionally people don't use something 18+ months out as "forward PE ratio"... thats a bit far out. You are using 2009 estimates, not 2008 which would be a more traditional forward measure for now.
p.s. IPI is at 17 forward PE on 18 months out earnings. MOS is at 13-14 on estimates 12 months out. So who is cheaper? I am not saying MOS will go up more than IPI - I am simply stating if your defense is valuation - there are cheaper stocks.
As for onespacetraveler - there is a reason I got into IPI - not random choice.
seekingalpha.com/artic...
Also I believe I said weeks before it came IPO it would be the hottest IPO of 2008.
Thanks
If the dollar continues downward, prices would increase even more.
Guys what do you think of a fertilizer cartel.Can this happen?
I also read somewhere that IPI has the technology to do horizontal drilling which might give it an advantage over the others.Also to be fair nitrate producers benefit more from floods because it is more soluble and washes away easier.Finally the only serious commodity pullback would have to be a result of food supply increases relative to demand and this must be some way off.
What is this onespacetravler blog you are talking about. Can you post a link. I thought that IPI would be trading at 90 by end of the year, i didnt think expectations were as high as $150-200.....
TraderMark, you were right this is the HOTTST IPO for 2008 and the market cap will likely reach 20Bill in 3-4 years. Man i am sooo pumped up right now.
On Jun 24 04:08 PM dolla bill wrote:
> IPI just dropped almost 7% in a day. You guys think it's a sign of
> a slowdown or just a lot of people capitalizing on the $76 high this
> morning?
On Jun 25 10:16 AM Diogenesthed og wrote:
> I can't help but think this is just an example of people cashing-out.
> Potash stocks have been a hot stock for a lot of people who know
> very little about the industry. These investors see $72/share and
> cash out. Another day or two down and savvy investors will see a
> bargain chance to get back in the stock. While I don't like to see
> a 10 point drop, i am still up 20/share and see low 60s as a chance
> to buy more!
>