Potash Bid Shows Something Deeper On Horizon

Aug. 23, 2010 11:46 AM ET
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Buyout rumors continue to swirl around the agricultural stocks after a hostile bid was place on Potash Corp. (NYSE:POT).  BHP Billiton Limited (NYSE:BHP) bid $38 billion or $130.00 per share the fertilizer stock.  Potash rejected the offer.  The whole agricultural sector soared off this news and has continued to stay strong.  Not only is Potash higher again today but stocks like The Mosaic Company (NYSE:MOS) are also continuing to show significant strength.  While the buyout may just seem like another mega company is trying to scoop up a profitable large cap, it may be more global and important than that.

With the world population growing quickly, especially in emerging markets, food is now a major issue. These agricultural stocks will play a key role in the growing food market all over the world and keeping the masses from starving.  This buyout bid is showing the world a much deeper realization by a BHP Billiton.  We should all  be aware of this in the coming future.

Gareth Soloway
Chief Market Strategist

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