Yes, Potash Corp stock is putting in a bottom for 2011 right now. I think for the rest of the year the pps will rise. If you remember way back when the BHP bid was priced in at $130/share (split adjusted, $43.33) the stock actually traded at a slight premium because most arbs thought that there could be a bidding war, but then the stock slowly sold off over the months during the bid fiasco and then once BHP officially pulled the tender offer, the stock hit a low at about $45.30 before rallying hard to about $57 for the beginning of 2011. The current price at $44.72 is pretty close to being exactly in between those two prices ($43.33 and $45.30) so I think it is pretty clear that the moron hedge fund trigger happy fools are in complete control of the intraday prices and just to get a read on what they think they know about the ferts, have an amusing look at the article that came out Friday on 'why' the ferts were getting sold off..
These geniuses for some reason think that the "underlying determinant of their stock price is corn" and that the upcoming EPS announcements will only "react temporarily based on earnings" and the fert pps behaves such that "share price will ultimately reconnect to the value determined in the futures market." [corn futures], so that, "These fertilizer stocks are actually derivative securities." [corn]. HAhahahahahaha FOOLS. It is clear to me that these expert 'analysts' simply look at the existing 'trend' which has a high correlation recently and simply declare this as the fundamental driver for the fert stocks, but they do not stop to think that what creates this 'correlation' are the simplistic idiotic day trading of commodity futures traders simply selling off wheat/soy/corn futures based on the dollar and equities declines caused by the latest Euro debt crisis headlines. They 'deduce' that A->B->C therefore A->C but they do not realize that A->B only exists temporarily and once enough time has gone by to show that earnings will continue to break historic records because of the real fundamental factors going on in the potash and nitrogen fert market this 'correlation' will cease to exist, and so A->C will cease to exist. An entire whole year (including quarter after quarter of record earnings growth) after the BHP bid, which was low-ball to begin with we are trading higher than the BHP bid Friday by only 3.2% !!! LMAO!! This shows you how flimsy the knowledge is on the fundamental factors for the ferts by these hedge funds, day traders and 'analysts'. They simply trade the ferts like bushels of corn and keep the spot prices correlated to make their charts and graphs easier to digest. Eventually though, this cannot and will not last. Fundamentals for the potash market have never been so tight. Inventory is at record lows and dwindling, Q3 and Q4 potash supplies are COMPLETELY sold out! Canpotex has already negotiated and locked in much higher potash prices for the next quarter with China and India, while demand continues to sky rocket. All the ferts need on a long term consistent basis is for corn to trade basically favorably for farmers so that they can continue to have decent economics as far as having money to buy tractors and fertilizer, etc. They do not quite care if corn is at $4, $5 or $6 a bushel (20% to 50% range in differences in price), as long as it is profitable, demand will still be strong while prices for fertilizer move up because of record low supplies. Also, it is amusing how when we hear that a crop report expects the harvest to be slightly better than expected, the ferts just get killed. LMAO. Actually, geniuses, this means that MORE fertilizer must be used after such a large harvest zapped the soil of all it's nutrients and farmers prepare for the next plantings! More fertilizer used for upcoming plantings means more tonnage in fertilizer sold, and multiply those extra tons by a higher potash price and you have, yes, I'll say it again, record earnings, quarter after quarter. Why is this so hard for the expert 'analysts'?? POT should be trading now, in my opinion, at about $68 to $74 per share. 2011 saw a base forming between a defined range between $52 and $62, however recently Greek banks and Euro debt concerns have knocked down the market and so the ferts have been slaughtered, all the while you have geniuses like in the article above telling us that the fert stocks will have prices dropping lower and lower into 2012, hahahaha, wow, seriously? I myself am loading up the boat at these prices, got some NICE $42's and loving the mid $40's for POT and even grabbing more MOS because of the weakness caused by the Cargill divesture. It is like an early Christmas snapping up cheap shares in these names. Have a ball guys because come 2012, if the share prices are still depressed the companies have enough excess cash floating around to start buying back up shares and/or paying out large dividends. The P/E multiples are trading at record lows and the earning estimates on all companies are moving lower except for the fertilizers, they will outperform this market in Q4 and 2012. Go to potashcorp.com if you want the TRUE story on the outlook for the fertilizer market, do not read what these idiot 'analysts' think are the underlying fundamentals of the market, they are hypnotized by the 'mechanics' of the trading and mistakenly equate those correlations as truth in price when in fact it is simply ignorance en masse. GLTA!
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