Potash Corp. of Saskatchewan, Inc. (POT)

All Comments on POT

  • commenter
    einstein p
    fleet
    Oct 03 01:13 PM
    My Website
    The Real Reasons Fertilizer Stocks Are In the Dirt [view article]
    There are so many factors at play, it makes your head spin.

    Many people are comparing the "commodity" bubble to the dot com bubble. Frankly, I don't see the comparison at all. MOS may have missed, but they still made 1.2B for the quarter and trades at a forward PE of just over 2. How does one compare that to dot com companies that made little or no money and or were trading at triple digit multiples?

    The build up in inventory shouldn't be a surprise considering the current credit situation. Farmers need credit to purchase seed, fertilizer, and equipment. Purchases have been delayed. Unfortunately, it's the height of planting season. I would be more inclined to worry about food shortages, than the price of MOS --- which is ridiculously cheap, along with the rest of the group.

    In regard to more supply coming on line, I have a couple of thoughts. Firstly, if the business is so bad why would companies like Rio Tinto or BHP Billiton want to get in at the top? To the contrary, I would not be surprised to see BHP make a bid for one or more of these companies instead at current levels. POT is buying back a great deal of their own stock, which they considered extremely undervalued.

    Once the hedge funds are done selling, credit returns to normal, and the market looks at the fundamentals, I'm sure that Mr. Mickey is right. When that will be, however, no one knows. I've been wrong on POT and MOS for 40 points each. Ouch!     Reply
  • commenter
    leh
    Oct 03 12:45 PM
    The Real Reasons Fertilizer Stocks Are In the Dirt [view article]
    manusceo is spot on--this is an institutional and hedge fund liquidation sale. You have to be a damn fool not to see MOS as a steal at these prices IMO, especially if you have an investment window of 1-2 years or longer. Reply
  • commenter
    bobbobwhite
    Oct 03 12:05 PM
    The Real Reasons Fertilizer Stocks Are In the Dirt [view article]
    Me too, me too, and in conclusion, me too. Reply
  • commenter
    CT
    Programmer
    Oct 03 11:53 AM
    The Real Reasons Fertilizer Stocks Are In the Dirt [view article]
    I think cstauffer is right. This market is NOT FUNCTIONAL. A fwd PE of 2.4? That sounds like a company circling the bowl ready to go into bankruptcy. Connoco Phillips less than 6. RIG at a little above 6. The dry-bulk shippers are all below 3. These aren't fly-by-night companies. We're talking great cash flows and ample growth. Sure, more potash is coming on line. And you know what will happen? More people in emerging economies will add more meat to their diet, which requires 8 times the corn feed as a vegetarian diet. So you'll see demand go up to match. Ag had an incredible run (and I cashed in on a lot of that over the last year with a 100%+ return on YARIY). We won't see that kind of run again. But long-term these (and most of the rest of the market) will bounce back to its normal 15-20 PE range. Even if their current profits get cut in half due to supply increase, I think from their current price they have 100-200% upside. Bottom-fish if you want, but I bought them yesterday and will just sit and wait. Reply
  • commenter
    cstauffer
    Oct 03 11:28 AM
    The Real Reasons Fertilizer Stocks Are In the Dirt [view article]
    Thanks for the posts. I am not alone, my sanity is intact. This market has ceased being a functional market and many people are trying to draw conclusions from the price movements of stocks during a time where forced selling is overwhelming rationale buying and pushing stock prices to unimaginal levels. Reply
  • commenter
    Socialism
    cannot
    compete!
    Oct 03 11:24 AM
    The Real Reasons Fertilizer Stocks Are In the Dirt [view article]
    I was long POT and got longer a couple days ago. IMO, the drop was unwarranted. Sure, MOS missed by a bit...but they're *still* looking at tripling earnings over the previous fiscal year. The stock plummets 40%, even though potash pricing is still increasing? Thanks, but I'll hang in and take advantage of the panic selling. The real truth has nothing to do with the author's points, and everything to do with forced selling by the hedgies. Once folks stop panicking and capital flows back into the markets...the ags are going to spike.

    Long POT.     Reply
  • commenter
    manusceo
    Oct 03 11:22 AM
    The Real Reasons Fertilizer Stocks Are In the Dirt [view article]
    Down slide almost totally a result of hedge fund unwinds and of course now the analysts jump in with downgrades--even though their targets remain 100-200% higher than current share prices!!! Reply
  • commenter
    anopenmind
    Oct 03 10:59 AM
    The Real Reasons Fertilizer Stocks Are In the Dirt [view article]
    I now realize how much sway Jim Cramer has on stock prices, having started his doomsday jabs at Ag's few months ago. One statement a month ago had him positive on Potash; then, negative, leaving one wondering "what did he mean?". Personal gain for Cramer? Analysts, including Morningstar, had POT tracking toward $410 few months ago; then, $270; now, who knows. Others this week said "farmers won't get bank loans for planting season", striving to drive Ag's further downward. However, Reuters reports: Rural banks in U.S. farm country are not freezing credit to customers like large money center banks, offering a bright spot in an otherwise gloomy economy, industry experts said on Thursday. Rural banks are able to do so because they rely on core deposits for funding rather than commercial financing from Wall Street investors and have largely steered clear of the subprime housing loans. Farmers have made good profits and have solid credit with their farm and equipment assets...and, people still gotta eat. Ag's are not similar to segments like autos, airlines, retailers. There is always the core growing demand. Despite doom & gloom, I'm staying put with Pot, Mos, Agu, Mon.
    Reply
  • commenter
    MSmailbox
    Oct 03 10:29 AM
    Buy, Sell or Hold: Potash Deserves Another Look [view article]
    Wow! I just got smoked... I bought in at around $130 and then, I saw it drop over $11, in after-hours trading. Things have only gotten worse, from there. I am holding, but I am getting a tad nervous, as this is by far, my largest position. It seems that the company might lend us some insight, as to what's going on, but I haven't read anything. Reply
  • commenter
    jamookey
    Oct 03 09:45 AM
    The Real Reasons Fertilizer Stocks Are In the Dirt [view article]
    Grain levels still at record lows.That statement says it all.Populations are exploding.Food shortages won't be an issue?I doubt that.The same reasons for the commodity gains are still out there.Reduced demand?how do you figure?Unless people start dropping dead at a high rate,I don't see the reduced demand.Look at oil.What has changed since they ran the price up to 149$?Do they think with cheaper gasoline that people will drive less?Don't look now but many areas in this country have no gasoline.I have had people fron N.Carolina to Florida tell me stations are out gas or getting shorted on their deliveries.Has Iran decided to play ball with the IAEA?See what I mean?Nothing has changed,but we are supposed to believe that there is more than enough oil,plenty of fodd so commodities are a dead issue.Bull. Reply
  • commenter
    cstauffer
    Oct 03 09:34 AM
    The Real Reasons Fertilizer Stocks Are In the Dirt [view article]
    Fundamental analysis of the company behind a given stock is the only assessment of value for a given stock that is based in known inputs. Momentum caused by de-leveraging, sector rotation caused by program trades or false hope of a recovery in out of favor stocks or simply over-reaction to various reports that contradict long-term trends are much too unpredictable indicators for most investors to untilize. There is much more certainty associated with taking a company such as Mosaic, which today sells for a 2.5 forward PE and assign much more conservative earnings expectations and multiple to project a fair valuation for the stock. If this is done, it becomes very evident that the price of the stock today is significantly undervalued. These stocks are not dot.com stocks which had no earnings, no assets and no proven market. These stocks have substantial assets, strong balance sheets and an end market that is critical to the survival of the human race. Reply
  • commenter
    irondoor91
    Oct 03 09:00 AM
    The Real Reasons Fertilizer Stocks Are In the Dirt [view article]
    The longer one continues with fundamental analysis and value-based investing in these names, the more money will be lost. The question is, how are these companies going to perform in a deflationary environment, and how do they scale back to respond to it. Reply
  • commenter
    cstauffer
    Oct 03 08:10 AM
    The Real Reasons Fertilizer Stocks Are In the Dirt [view article]
    It is hard to argue that there was a lot of momentum in these stocks during the first half of 2008 and that for that reason expectations were too high. However, these stocks never really got significantly over-valued based upon even more realistic growth prospects. I believe that there is more a play here in recent price moves than a high momentum sector falling back to earth. If you take a look at non-fertilizer agriculture stocks such as AG, DE, and MON, they are also being hit extremely hard, while the world's grain inventories are still sitting at record lows. It is hard for me to believe that there has been significant demand destruction in the world over the last two months in soybean, wheat & corn to account for even a fraction of the multiple contraction that we have witnessed recently in agriculture stocks. Reply
  • commenter
    peachberry_t
    ea
    Oct 03 04:08 AM
    The Real Reasons Fertilizer Stocks Are In the Dirt [view article]
    you've written an informative piece and my hat's off to you for that

    i don't think much has been said here that hasn't already. yes the earnings estimate were aggressive on these firms, and yes these firms were undervalued. but this was all true even before the 25% plunge yesterday.. the market is nuts, period

    at this valuation it's about time to buy in.. you could wait for another coupla analysts to revise estimates downward but that's really just timing a bottom, and no one can do that perfectly

    short term you'll have to stomach volatility but this should be a fine play long term

    disclosure: long POT     Reply
  • commenter
    cjct
    Oct 03 02:52 AM
    Potash Corp.: Poised to Soar Once Hedge Fund Worries Subside [view article]
    This thing is sinking like the titanic. That's the problem with "hot" stocks all the clowns who pumped it to ridiculously high levels all try to leave at the same time and send it to rediculously low levels...This sellof in POT is not over...the fertilizer story is dead...its a cyclical it cannot stay strong in a global economic slowdown...people have to admit that a fertilizer stock like POT at 240 was a little idiotic...i thought for a little while that they had found the cure for cancer with the excitement that some people had over owning this stock. Reply
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