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An integrated fertilizer and related industrial and feed products company.
Look out Russia, you are giving me a massive gain if we put sanctions on you!
$5 off the bottom and $11 from the top 4%+ div helps you wait while the hungry world provides upward pressure
Chosen based on list of Price/Div/5 year dividend growth
Scruffy believes in this company.
POT dropped along with the potash price after the Russian potash cartel broke up. Now that the cartel has reformed potash price should rise. While it may take a year to show up in earnings gains, you collect 4.2% dividend waiting
Potash is not in short supply, but it is finite and needed in all fertilizer. Demand is expected to grow by about 2% per annum. At some point D > S and this will begin being priced in years in advance. The recent move by Uralkali is a short term blip (buying opportunity) in an otherwise structural up trend. Potash corp has the best reserves. Capex is spent and management are focused on creating value for shareholders
Food is the future. Trend towards organic should also help. Stock price should recover but there is a high and growing dividend as it does.
Based on article here "A Holiday Miracle ..." there should be an end to falling fertilizer prices, hopefully rising prices, too. There may also be pent-up demand from fertilizer buyers who were waiting for prices to go still lower. Pretty good balance sheet and good dividend help, too!
Increase in demand for products required for agriculture uses.
growing population requires more food and more fertilizer. Recent pull back a result of Russia/Belarus squabbles.
commodity. Not a time for commodity yet.
Potash may be a commodity but the suppliers are organized in a cartel to control supply and therefore prices. Long term demand for fertilizer is increasing with population and emerging economies consuming more proteins.
The world needs food and food needs fertilizer. Potash has a lock on...potash.
I added POT to my CAP at a price of $57.60 during the Great Recession. I thought that was a good price. I bought shares around that time. But Potash mineral prices have fallen since the recession. During the recession, the price of Potash was over $800 a metric ton. It fell over the years to below $400.But on July 30, 2013, Uralkali announced it was going to break out of the joint-venture from Belarus Potash Company to sell potash o the global market. Uralkali is one of the world's largest potash producers. Before the announcement, the cartel of Potash, Mosaic, Agrium, Belarus and Uralkali made up about 70% of global potash trade. They were able to keep prices higher. With this cartel breakdown the price of potash fell to a low of $358 per ton. This brought Potash stock price down to a low of $28.55. I purchased a trading position on $29.65 on 8/5/2013. I believe this range will be the low for the stock. They are paying a good dividend of $1.40 which gives them a dividend yield on my $29.65 purchase of 4.72%.Potential growth drivers:Increasing global populations will place pressure on food demands. Acreage devoted to farming is decreasing which means more food must be produced on less land which means increasing use of fertilizers. Crops take nutrients out of the soil and that must be replaced. Corn represents a heavy fertilizer dependent crop. Ethanol production pressures demand for corn. If one believes that ethanol will play a larger part in global energy needs and if corn continues to provide much of the feedstock for ethanol production, then the demand for fertilizers will grow. Many things affect these growth drivers. Bad weather will reduce the demand for fertilizers. Declining farm incomes will mean less money will be spent on fertilizers. A weak economy slows demand for nitrogen which is used in industrial processes as well as fertilizers. Nitrogen based fertilizers come in the form of ammonia, urea, ammonium nitrate, and urea-ammonium nitrate (UAN). By using Nitrogen and natural gas to provide heat and hydrogen, ammonia is produced. Ammonia can then be combined with phosphoric acid to create di-ammonium phosphate (DAP) which is one of POT’s big sellers. And that brings us to one more obstacle. When natural gas prices go up it becomes more expensive to produce many fertilizers. And natural gas prices tend to go up when oil prices go up and the economy is booming. But today, natural gas is very cheaply priced that should help Potash too.Just some notes to keep me thinking about them at this value point.
I don't know if this pick from 08 will ever be good again. But I actually do think the recent weakness in POT dut to the recent cartel breakup makes for a good long term buying opportunity. I added a position to my retirement portfolio around the $30 mark.
Current depression in prices is due to market turmoil and short term price uncertainty by major contract buyers. Long term, particularly given movements against higher production GMO, fertilizer is the logical alternative.
Food. Nitrogen fertilizer prices are low right now because natural gas supplies are expanding to displace expensive oil. As natural gas prices stabilize, potash fertilizers will again become more competitive against nitrogen fertilizers.
beat up ag stock yielding over 4%
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