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EliteYoda

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  • Rising Potash Prices Could Threaten BHP Bid [View article]
    Yes, that is a fact. Doyle has been in the industry for decades and when he says the fundamentals are looking good for huge profits, its a safe bet to believe him. Potash prices per tonne are going to sky rocket again just as they did before the recession and Potash Corp will reap the benefits (yes, 'net benefits'!).
    BHP got their hand caught in the cookie jar trying to get POT for a steal, not gonna happen.
    If you chart MOS, AGU and the rest of the Ag sector over POT since the BHP bid you can see just as Bocan said, POT shares have been lagging because of the fear that the BHP bid will be successfull and those in over 130/shr will lose out, but note that arbs are at about 3-5% of total shareholders and investors in POT are not quick traders, they are long term serious investors who know the share price will see over 200/shr again (probably in the coming year 2011).
    The rest of the sector is up about 20% and the market itself is up about 10% since the bid and POT share price still fluctuating btw 142 and 149 price levels. If BHP walks or does not get approval, the arbs will scatter and the price will dip breifly to prob about 138-140 then next day it will likely sky rocket to where it should be trading in the mid 150's (though earnings on Thursday will prove much); watch for earnings above 1.20/shr, IF so then forget BHP bid it will no longer mean anything..
    cheers
    Oct 27 01:35 AM | 2 Likes Like |Link to Comment
  • Fundamentals still favor potash stocks [View instapost]
    Nice article. Right on man, Potash Corp is the crown jewel of Canada and I do not think it will fall at the low ball $130 bid by BHP. Sheesh, the share price was at a respectable $130 right before the markets tanked when the Euro debt crisis started this year and that was at a time when the potash market had just started to see signs that maybe a long term cyclical bull for the mineral was starting again and sure enough with all the droughts and shortages the potash price per tonne has started to rise again. The other fertilizers in the space have so far reported earnings tripled and POT leads the space so I think Q3 earnings should get very very interesting.
    I have a sneaking suspicion that Sinochem had decided to test out their strategic moves before doing anything official so they could get a read on the market and canadian regulatory environment. I think if BHP gets reg approval then Sinochem may just make an FU bid against BHP right at the last minute; just my opinion.
    BHP waiting to raise offer until they get reg approval, that much is certain; now arbitrauer/speculators holdings are at a mere 3-5% so I dont think a vote will go through for the $130 bid.
    Even though the media says a bidding war is 'unlikely', I think it just shows that they are impatient and do not know much about the sector. The grain and fert space is not like the tech sector, it moves extremely slowly but always in the 'proper' direction. In longest time frame scenario, I think Canada could delay by another month, then BHP could delay by at least one more month then Sinochem could make things very interesting with a counter because IF BHP gets reg approval, it will be very difficult for Canada to then say china cannot be owners especially after they had said there were willing to make major concessions on the deal. OTPP basically slammed the door in their faces with a very rigid demand of 20% guaranteed returns and total control of POT which forced Sinochem to retreat for now. For china its not the money, they dont care if they pay 50Billion or 80Billion for potash corp, they just know they need to control a company which controls nearly 1/2 of the future potash of the entire world, it would be wise to block BHP now so that they dont have to pay ridiculously huge potash prices in the future which could turn out to cost them more in the end vs if they just bought out potash corp outright for even $240/share. I also think that the '$500/tonne' by 2015 price target for potash is actually somewhat conservative. It reached heights of near $1000/tonne just few years ago and china/india populations are exploding and weather problems and droughts causing crisis all over the world. With speculation thrown into the mix I can see potash prices doubling each year for the next 5-10 years so 2015 I would say prices around $1100/tonne and 2020 at around $2000/tonne! I know its sounds ridiculous but this is a mineral that cannot be reproduced artificially and is absolutely needed, cannot do without it and it is in short supply and barriers to entry are enormous. This is a no brainer, own Potash Corp! :)
    Disclosure: Potash shareholder since 2007
    Oct 23 07:10 PM | Likes Like |Link to Comment
  • It's Time to Take Some Profits [View article]
    Despite knee jerk reactions in the dollar, it continues to fall. Not sure that selling gold and stocks in exchange for dollars right now is a good strategy. But please, keep selling me your equities and I'll give you my worthless USD, thanks! :D
    Oct 21 03:22 PM | Likes Like |Link to Comment
  • Will Potash’s Prince Ever Come? [View article]
    On second thought
    ...just curious what your reasoning is behind thinking that POT share price may drop to or below $100 if BHP walks away from bid?
    I personally see a steep rise to 114/shr days before the bid then 2+ months of drift in the share price since the bid and 130/shr days before the Euro debt crisis, so you dont think w/o the bid POT share price could be where it is today?
    to me, any others' analysis is valuable to consider (cant find much on the internet about what POT share price should be pre earnings but post bid)
    thx
    Oct 20 11:53 PM | Likes Like |Link to Comment
  • Will Potash’s Prince Ever Come? [View article]
    Sound logic. Granted the spot price of POT could do anything at any time like any other stock on this crazy traders market. I think earnings next week will really sharpen the picture. Analysts are looking for $1.15 per share, with an annual eps of about $5; what is interesting though is that q1 and q2 have already brought 1.47 and 1.55 eps respectively, leaving about 1 dollar eps for q3 and q4 but for years Potash corp q3 has always been stronger than q1 or q2, and q4 has usually been stronger than q3. With a p/e of about 28, q3 eps of anything at close to 1.20 would equate to about a fair pps of $130 (BHPs offer). If it is over 1.45 eps, all bets are off brother (prob > pps $150).. though its true we could see another financial debt crisis or riots in europe causing the markets to tank and see POT below $100, in that case it would be a Strong BUY.
    Disclosure : Potash corp shareholder since 2007
    cheers
    Oct 19 11:18 PM | Likes Like |Link to Comment
  • BHP Billiton (BHP) files to block a bid by Potash (POT) to get a look at confidential BHP documents covering its strategy to win over regulators in its $38.6B hostile takeover offer. The Saskatchewan government is expected to say as early as this week whether it will back the offer.  [View news story]
    I agree, even considering to not allow a foreign enterprise to bid for domestic company violates most conceptions of free enterprise and possibly in this case even the Canada Investment Act.
    Oct 19 10:42 PM | 1 Like Like |Link to Comment
  • Gold Could Climb to $1500 After Correcting [View article]
    The dollar is crashing and Gold is rising, it IS that simple.
    Oct 18 08:47 PM | Likes Like |Link to Comment
  • Will Potash’s Prince Ever Come? [View article]
    Exactly, I think anyone even mentioning the phrase 'out of luck' in the same sentence with the prospects for Potash Corp obviously does not know much about the company or the industry. Potash book value as calculated by many top analysts say that the assets (liquidated) alone are worth about $60B, not to mention the earnings picture, which is well, basically a ray of bright light (food shortages, increasing population growth, rising commodity prices and potash, steep industry barriers to entry); look what happened in 2007.
    I think this whole article actually in itself acts as the 'girl’s mother urging her daughter to accept a marriage proposal because otherwise, no one else will want her' by forgetting one very simple point among all of these sideshow concerns with the bid; which is that in the end, the main 'defense' for potash corp will be for the shareholders to simply NOT sell their shares! Yes, it is that simple. Once Nov 18 rolls around and the share price still trades in the $142-$149/shr range, how many long term potash investors do you think will tender their shares for $130/shr? None.
    Unless you think that if BHP walks then POT share price will crash back down to where it was pre bid ($112/shr) BUT remember, BHP timed the offer brilliantly after POT share price had sagged from the $120's because of the Euro fear downturn in the market, just as POT got back to about $114/shr and climbing rapidly back to probably $130, BHP made the offer. Since the offer, Agrium, CF, MOS and all the rest of the Ag space has climbed nearly 30% and the market itself has gone up about 10%, what has POT done? Nothing; traded btw $153-$141. Why? because arbitrage games as well as long term shareholders NOT selling. SO, what is likely to happen when or if BHP walks? The arbs will scatter and their roughly 3-6% stakes will evaporate and prob make share price dip to about $135 then in a matter of days it will likely go over $180/shr.
    Just watch for earnings, if the Q3 earnings are a blow out, investors will pile into this stock and leave BHPs pathetic bid in the dust!
    So what 'how can Potash fend off BHP?', easy.. shareholders just sit on their shares and NOT sell waiting for days filled with fields of green, not to mention the possibility of an enormous $70/shr DIVIDEND which sells off assets which really does nearly nada to the earnings picture.
    This one is a no brainer, DONT SELL, that is how Potash 'defends' itself; aka it doesn't need a 'defense'. duh
    Oct 18 08:42 PM | 6 Likes Like |Link to Comment
  • Potash Corp.: Attractive Opportunities With Minimal Correlation [View article]
    ya nice, a $70 per share special dividend would be a nice cherry on top ! And even better is that it should affect the share price hardly at all cuz it makes up for hardly any of their earnings, if anything it may make POT share price spike in coming days because people may pile into the shares just to get access to the huge div.. we could perhaps even see a three way action in a bidding war...
    Oct 11 07:31 AM | 1 Like Like |Link to Comment
  • How to trade a weak job market? Step one is to fully realize the stock market doesn't care about jobs. As long as the dollar's weak, fund managers will be forced to allocate to equities.  [View news story]
    Haha, this market is fascinating, basically you have the government destroying its own currency and buying equities boosting the markets and individual investors sitting in treasuries for no reason not really even keeping up with inflation as companies sit on the sidelines with huge cash piles waiting for the Republicans to storm congress and reverse all the policies.. if this relatively flat jobs report causes an uptick in the market, I cant even imagine the strength of the rally we may see if the Republicans get the house/senate in Nov!! not to mention the continued defacement of the dollar... wow hehe kind of funny, but then again not :-D :-(
    Oct 8 08:06 PM | 6 Likes Like |Link to Comment
  • How Gold ETFs Are Killing Gold Miners [View article]
    Wait, I see what the argument is but unclear on the consequences, so does this mean that a miner etf like GDX is undervalued because investor money has moved over more into the pure gold plays like GLD and so since it has been under wieght and has lagged the gold etfs it will outperform in the future?
    or..
    is it that a miner play like GDX will continue to lag as it has and so will underperform the pure gold plays?
    thx
    Oct 8 07:59 PM | Likes Like |Link to Comment
  • Potash Corp.: Attractive Opportunities With Minimal Correlation [View article]
    ya agreed.. definitely .. good points and very interesting articles thx for the links..
    I think at this point, BHPs bid looks very weak and will prob be a 'non-starter' so I have pretty much just tried to put the imaginary $130/shr price out of my head and concentrated on earnings and the Ag market upswing.. its interesting that in trying to simply analyze where POT stock price should be at this point in the market w/o a bid of any kind it makes me think that the current price of about $145/shr is right in the proper range, especially with the ceo coming out the other day saying that the company on its own could easily dwarf the highs of $240/shr coupled with MOS reporting top line tripled this quarter...
    though I have been trying to pay less attention to any 'news' on the Sinochem bid out of China because it all seems very manipulated and actually I think intended to spread disinformation for their own purposes.. a month ago, the Chinese govn mandates that Sinochem make a bid for POT, now after the prelim report (regulatory) comes out favoring a BHP bid, naturally they want clarification before making a bid that it will have a chance of getting regulatory approval so now the news from Sino since the reg report has been nothing but about the 'dwindling' chances of Sinochem finding funding and the CIC uncomfortable about backing the bid.. whatever, so government gives marching orders to Sino then turns around and will not back sino for a bid??! Come on, just do what you need to do their huge complex strategic moves are actually kind of obvious .. 'Save the bold moves for the brilliant players' (Heist) :P
    then again, were not talking about buying a toaster oven so I see too that this thing could go on for months..
    very interesting that POT still trades down below 14X earnings, I did not know that . actually kind of makes me more bullish on the stock..
    Oct 8 07:43 PM | 1 Like Like |Link to Comment
  • Sinochem: A Thorn in Saskatchewan's Side? [View article]
    hmm great points, very interesting.. totally agree that the sino led buyout doesnt seem to be as huge of a difference vs the BHP scenario when you consider both will prob turn on mines 'full bore'. Canada also must consider its 'investment climate' and it would seem questionable to allow an aussie company to takeover and not allow a chinese company takeover; albeit 'state-owned' yes is a 'concern' but IF sino was willing to make assurances to the province that they would stay within the canpotex royalty structure, it may actually be a 'net benefit' to canada for the chinese to take it over vs BHP!
    I still have not seen analysis of where POTs share price would be at right now if there was never any offer; it was really kind of irritating that BHP made the offer when they did because the Ag space was just heating up as well as the huge Sept rally and days before the bid, POT at $114 was looking like it was on the brink of a break out, Ive read some articles that put a liquidated worth on POTs assets greater than $150/share alone! Have to give it to BHP, GREAT timing BUT could actually back fire - if they would have started out with a more reasonable bid, they may have gotten away with it but now they may eventually over pay getting their hand caught in the cookie jar :P
    Oct 7 01:56 AM | Likes Like |Link to Comment
  • Gold Could Climb to $1500 After Correcting [View article]
    ya I totally agree, who in their right mind is going to try to walk in front of this train?! Not only that, the curve looks to actually be getting steeper, which true will call for a correction, but BEFORE 1500? hmm maybe AT 1500 or above, I do agree that there will be a slight burp btw 1500 and 2000.. what is the consensus about the affect of the friday jobs number? If good numbers stocks will go up so will gold continue to rise with stocks ? If bad numbers, stocks will falter, so gold will rise?! Anyone like the GDX for a more volitile play here? cheers
    Oct 7 01:34 AM | 2 Likes Like |Link to Comment
  • Wednesday Bond Market Recap [View article]
    What is the forcast for the 20yr yield? Are we starting to see a bottom in the yield maybe? Bought some TBT today, wondering if it will go up anytime soon..
    Oct 7 01:29 AM | Likes Like |Link to Comment
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78 Comments
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