"Investing in agriculture-related companies has been one of our main themes for the past year, and we still favor it," say resource experts Roger Conrad and Yiannis Mostrous.
The co-editors of Vital Resource Investor note, "We're adding a new stock to the portfolio that should benefit from the increasingly higher global demand for fertilizer: Potash Corp. (NYSE: POT).
"Potash is the world's largest and lowest-cost publicly traded potash producer, the fastest-growing segment in the fertilizer business. Its potash reserves are sufficient for more than 100 years of production.
"The company controls about 70% of the world's excess capacity. Potash Corp is also the world's third-largest phosphate producer and fourth-largest nitrogen producer. Current phosphate reserves should last more than 50 years.
"The company's low-cost production achievement is an important asset as potash is the highest margin nutrient, and its production process has historically created higher barriers to entry for potential competitors.
"As a result, the company's pricing leadership has remained one of its big assets. Potash Corp has historically been a strong cash flow-generating company that used its cash to consolidate its position through outright acquisitions and by taking substantial stakes in other companies around the world.
"As a result, Potash Corp owns 21% of Sinofert Holdings, the biggest producer and distributor of fertilizers in China, giving it even more access in this rapidly growing market.
"It also owns 10% in Israel Chemicals--one of the global leaders in chemicals production used for the improvement of agricultural, industrial and consumer and fertilizer products.
"Potash owns 28% of the Jordan-based Arab Potash Company (APC), which develops the minerals of the Dead Sea. The company also owns 32% of Chile-based SQM, a worldwide leader in the production of specialty plant nutrition, iodine and lithium.
"Finally, Potash Corp is part owner of Canpotex--a distribution company and the world's largest exporter of potash--together with Agrium Inc. and The Mosaic Company. Potash Corp. is the new buy in our Vital Resource Investor portfolio."
Steven Halpern's TheStockAdvisors.com offers a daily look at the latest market commentary and favorite stock picks and investment ideas from the nation's leading financial newsletter advisors.
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Reader Comments (Page 1 of 1)
10-28-2008 @ 2:18PM
contrariansite said...
Excellent article. Money Map Report editor Horacio Marquez says it’s now time to buy back into Potash Corp. (NYSE:POT). He advised investors to sell the stock at the start of August before it plunged 20%.
Snap Up Bargain Potash Corp (POT)
10-28-2008 @ 2:20PM
contrariansite said...
http://www.contrarianprofits.com/articles/horacio-marquez-says-snap-up-bargain-potash-corp-pot/5626