David White

20 'Babies with Bathwater' and 20 'Dogs with Fleas' for the Week

In the news today, the number of US airline departures declined. Airline stocks were down on the news. Swine flu hasn't even hit in force yet.
In reference to Swine Flu, only 45M swine flu vaccine doses will be ready for the US in October. They had expected 120M to be ready. This is bad news for the airlines.

What's in Store for the Fertilizer Industry?

Emerson: It looks to me like there is support at about $145. There was also support at about $163-4. It seemingly went through that today. The semi-major overhead resistance is at $175, $183, and $190. The options are really bunching up tightly now. It makes one think that a turn around is likely soon. I think the petroleum stocks news comes out tomorrow, since this is a holiday week. One would think that news would tend to make oil go up. That would likely have the same effect on other commodities and on POT. Of course, I thought Gustav would tend to make oil go up. Apparently the relief that it wasn't a category 4 to 5 hurricane was enough to put the lie to that scenario. A lot of people thought that oil would bottom in the $90 - $100 range (i.e. retrace to a point constituting about half its recent upward movement). We are getting very close to that now. If we get a sudden spate of very bad economic news, oil may go below even that. Without such an impetus, it seems likely to me that the soothsayers will be approximately correct.

What's in Store for the Fertilizer Industry?

Baker Hughes just put out a report that the refinery damage from Gustav may be as bad as that for Katrina. This should buoy oil and gas. Also Zaks this morning put out a target estimate for POT of $250 based on 2008 earnings (estimated PE at that time would be 18.9). This would be for late Jan. or early Feb. in 2009, when Q4 results are announced. One of the most respected analyst groups is saying the stock will almost double in 6 months. That is encouraging.

What's in Store for the Fertilizer Industry?

The fact that KDB seems to be seriously interested in buying a big part of Lehman is likely good news for the market. It may effectively make Lehman easily able to weather the bad loan problems yet to come. If this deal happens, the entire market may run up. It is an election year after all.

What's in Store for the Fertilizer Industry?

It has occurred to me that this stock amy wait until it gets near its next earnings release. Then it may start going up on what will undoubtedly be really fantastic earnings for Q3. At the current price, $155, the PE after Q3 will be 16.7, and after Q4 results it will be 12.3. This is for a company that is supposed to grow 70% next year.

What's in Store for the Fertilizer Industry?

I agree. It does seem the long term prospects for POT are excellent. Don't know what's in store for the short term though. September is a bad month. It's negative historically. POT is down again today. However, that may just make it a bargain in the short term. I think the petroleum stats get reported tomorrow since this is a holiday week. Since most things were shut down (including shipping intakes), it seems likely that the petroleum draw downs will buoy the commodities, especially oil. This may help POT et al in the short term. Does anyone have any idea when these stocks are likely to turn around? The fundamentals are really good, and everyone wants lots of food to eat.

Potash Corp. Earnings Shouldn't Peak Until at Least 2011

8-28-08: Oil is up again today. This is probably bullish for POT. The Q2 GDP was also substantially better than expected. Corn is down a little. All this seems like it should eventually lead to a gain in POT on the day today. Of course, it just recently went above its 200 day moving average. It could go back to it again. The odds should favor upward to a slight degree. The good economic number should generally make commodities go up. POT is a good stock, even Cramer touts it.

The Commodity Comeback: Sooner Than You Think

I should mention that I think there is likely to be long term upward pressure on most if not all commodities for the foreseeable future. The fastest growing economies will start to use more of all of them. This will put upward pressure on the prices of all of them. Fortunately for the US, we are relatively food rich. I hope that situation doesn't change.

The Commodity Comeback: Sooner Than You Think

The dollar's longer term recovery will likely be predicated on the US's ability to stem its oil importation trade deficit. T.Boone Pickens estimated that to be about $700 Billion in 2008. The US economy obviously cannot afford to have that large an outflow of monies from its economy. The US has to conserve. It has to use alternate energy sources. It has to produce more oil itself. If the US can do a good mix of these things in the relatively near future the US dollars rise could be sustainable. If it cannot, the dollar will rise. Then exports will lessen due to higher costs. Then the US dollar will fall again. Perhaps some other bad event could also happen to make the dollar fall again. I think we, the US, should try very hard to make significant near term headway in all three of the areas I mentioned above.

Retail on a Tear - Fast Money Recap (8/11/08)

Today K+S AG a European specialty fertilizer supplier reported fantastic earnings. They more than quadrupled the year ago quarter. This may be the impetus to turn around the POT, MOS, and AGU trades. They moved to the upside yesterday when the dollar weakened. However, they are continuing to move up today even with a relatively strong dollar. Grain futures are up today. Oil futures are up slightly. Things are boding very well for POT et al.

Potash Corp., Agrium Caught in Industry-Wide Downturn

After all was done today, POT was down slightly, but the bounce off of the 200 day moving average was still intact. Actually POT was down less than the market on a percentage basis. This was a mildly positive sign. It gives another indication that POT may want to head upward in the very near future.

Potash Corp., Agrium Caught in Industry-Wide Downturn

AGU got a reiteration of a buy rating from UBS today. This is generally good for Ag stocks.

Potash Corp., Agrium Caught in Industry-Wide Downturn

Apparently AIG's $5.4 billion loss on mortgage debt was a big downer for the market. The Initial Jobless Claims rise didn't help either. Ditto a bit of a down outlook by Walmart. Still oil and grains futures are up, so the Ag stocks should rise, especially from where there are at this point in the day. This could be fairly important to the near term performance of POT et al. If they can sustain the small uptrend from yesterday, they may go screaming back up. If not, they may still have further downside first. I am hoping for the former.

Potash Corp., Agrium Caught in Industry-Wide Downturn

GPS (the GAP) same store sales decreased, but they were higher than expected. GPS raised its guidance for the FY by 8-10 cents. Since GPS and JCP haven't done anything really exciting lately, this is a bullish sign for the market.

Potash Corp., Agrium Caught in Industry-Wide Downturn

Basically the store sales seem about as expected. The department stores are getting hit, while the discounters generally are doing well. There are some exceptions such as GPS, URBN, and ARO, which did significantly better than expected.