Potash turmoil 'a complete game changer'


Credit Suisse calls the dismantling of one of the world's largest potash partnerships "a complete game changer," with share prices in the sector possibly cut in half. "Our guys are saying don't go anywhere near" the big fertilizer names; "we would not be bottom fishers here."

JPMorgan is out defending the group, thinking Mosaic (MOS -21.4%) should be down $8 and Potash (POT -20.9%) down $5; says a $50/ton drop in pricing would knock EPS by $0.75 for MOS and $0.40 for POT, far better than peers.

IPI -29.5%, CMP -26.8%, AGU -3.8%, UAN -2.5%, CF -0.2%.

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Comments (12)
  • Hillbilly Stock Star
    , contributor
    Comments (743) | Send Message
     
    $POT got long.
    30 Jul 2013, 11:10 AM Reply Like
  • David Pinsen
    , contributor
    Comments (1747) | Send Message
     
    If you want to hedge to limit your downside in POT in the event of further declines, here are two ways to do that: http://seekingalpha.co...
    30 Jul 2013, 07:04 PM Reply Like
  • Matthew Brown
    , contributor
    Comments (957) | Send Message
     
    just added more to POT.
    30 Jul 2013, 11:19 AM Reply Like
  • 13761362
    , contributor
    Comments (382) | Send Message
     
    this certainly strikes me as good news for the consumers of potash. http://bit.ly/16zgbWn sporting a rather high p/e so i'm not sure i'd say pull the trigger. perhaps the best of all would be this "small name": http://bit.ly/16zg9Of had a sell off earlier last week and has done nothing but soar ever since.
    30 Jul 2013, 11:24 AM Reply Like
  • jhample
    , contributor
    Comments (3) | Send Message
     
    Still a good value long term in this segment. Potash price down, but demand will be up.
    30 Jul 2013, 12:46 PM Reply Like
  • bberuch
    , contributor
    Comments (314) | Send Message
     
    I hold shares in MOS and IPI (intrepid potash)
    this breakup will probably depress potash prices for an extended period of time. I will move cautiously with regard to adding to positions and would plan not to buy more till the dust clears.
    30 Jul 2013, 12:46 PM Reply Like
  • XTigerX
    , contributor
    Comments (308) | Send Message
     
    There is probably no way POT goes down 50 percent. I'll buy calls if it does though
    30 Jul 2013, 01:19 PM Reply Like
  • Jason Burack
    , contributor
    Comments (2119) | Send Message
     
    All of these potash companies are not going bankrupt. Many can refuse to sell at spot prices like what Cameco and Areva do in Uranium. Only sell their product at a much higher price to spot price on a long term contract.
    30 Jul 2013, 01:54 PM Reply Like
  • unclemike7849
    , contributor
    Comments (360) | Send Message
     
    Nitrogen is still the only place to be in fertilizers..........CF is still under priced even after it's 12% jump yesterday and small pullback today due to negative news about potash suppliers. CF will continue to increase although I will probably sell most of my position by the 3rd quarter in order to lock in exceptional profits from the last 3 years.
    Will be back in when the price is right again.
    30 Jul 2013, 02:47 PM Reply Like
  • dividend_growth
    , contributor
    Comments (2895) | Send Message
     
    This is only the beginning of the end.

     

    Potash bubble has finally bursted, POT will go to pre 2006 level.
    30 Jul 2013, 02:59 PM Reply Like
  • SA Editor Jonathan Liss
    , contributor
    Comments (492) | Send Message
     
    I added 30% to my PAGG position today. Certainly not a fertilizer pure play but heavy on names like POT (Canadian shares) and MOS. Still only a smallish satellite holding (2% total) but I still believe with the global population continuing to grow at a fast clip and China and India's growing middle classes demanding higher quality food, this is a good long-term play and am happy to add at these levels. This sell-off seems overdone to me, at least looking at this with a long-term view.
    30 Jul 2013, 04:07 PM Reply Like
  • Whitehawk
    , contributor
    Comments (3121) | Send Message
     
    This type of event could easily repeat itself in the crude market, leading to a significant share price decline of producers in one day. It would be illustrative to see who exactly held large short positions in the fert sector prior to this announcement.
    30 Jul 2013, 05:07 PM Reply Like
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