I jut bought shares of POT at $88 on 08/31/2009 at 11:13 AM.
I had sold my entire position at $97.25 in on July 2, 2009 for a nice profit. This stock is volitile, and with that volitility comes another opportunity to sell quickly back at $97.25, GTC+ after hours trade.
The Street.com report is dated 8/30/2009 so it is old but rates this stock a buy. However S&P rates the stock 2 stars out of 5; Ford Equity rates it a sell; and MarketEdge rates it AVOID.
POT tends to trade with energy stocks, I am long term bullish on energy.
Some noteworthy excerpts: Our risk assessment (S&P) reflects the cyclical and seasonal nature of the fertilizer industry and the nitrogen business’s greater price volatility. This is partly offset by the company’s broad product mix and leading positions in its main product lines, including the relatively stable potash business.
S&P goes on to say.. “our sell opinion is based on valuation. The shares had risen this year through mid-July, on expectations, we believe, of a recovery in fertilizer demand. However, recent export negotiations with India were settled at lower prices, and we expect a similar price decline for China, historically the largest export buyer for POT.” The stock was trading at $90.91 on the date of this report.
I think this is a buy opportunity because China is going to be oversold again and people all over the world have to eat. The stock traded as high as 184.88 an is trading at 52% of its high. S&P believes in a recovery in fertilizer demand yet they rate the stock a sell. Too conflicting of a report for me. There is a potential to miss this opportunity due to unexpected demand for fertilizer and a sharp rise in Natural Gas prices could increase the competitive advantage that POT enjoys at its Trinidad facilities which are now running at only 2/3 capacity.
More on POT -Potash Corporation of Saskatchewan is one of the largest fertilizer companies in the world, producing the three primary plant nutrients and phosphate animal feed ingredients. POT is the world’s largest potash producer (43% of sales and 62% of gross profits in 2008), the third largest in phosphate (31%, 23%), and the third largest in nitrogen (26%, 15%). Fertilizers accounted for about 70% of sales in 2008, with industrial and animal feed products the remaining 30%. Exports accounted for about 50% of fertilizer sales, including two-thirds for potash.