David White

Friday Outlook: Commodities, Emerging Markets

I should poitn out that MOS has an FPE of 3.8 and POT and FPE of 5. Their announced cuts will likely not hurt these two companies too drastically. Fertilizer is still needed by the spring. Many may be holding off buying it until a later date with the economies in bad shape. Both of these companies should recoup much of their cuts for this quarter and next in the following quarters. We still need food. IPI cut by a lot more (50%). It does not have the long term business relationships that POT and MOS have. It may get hurt. Also both POT and MOS have excellent balance sheets. After recent boom quarters they are flush with cash. They are in excellent shape. Staples are good stocks to own in a recession. These might be two. IPI is a recent IPO. It has had a lot of startup costs. You might want to avoid it in the short term.