The agriculture sector was hit with two major catalyst in the a similar period of time, giving companies like Potash Corp. of Saskatchewan (NYSE:POT), CF Industries (NYSE:CF), Mosaic (NYSE:MOS), Agrium (NYSE:AGU) and Intrepid Potash (NYSE:IPI) a big boost in share price.
It began when BHP (NYSE:BHP) made their $130 a share bid for Potash Corp. Then the confirmation came that corn and soybean yields would be far below prior estimates.
With the industry propped up from BHP's bid and assumptions some consolidation may start to happen, along with corn and soybean prices soaring, share prices of these companies and others connected to agriculture rose significantly.
Prices for all the companies mentioned above have soared since August.
Depending on if investors believe commodity prices are driving the move or the bid by BHP is the key factor, will determine how they are played. More than likely it's a combination of both. And depending on whether or not BHP is given the okay to take over Potash will decide how much of a factor that played in the sector.
At minimum if they are rejected, will see some pull back in the stocks. If they go forward, they could continue their upward climb for some time.
Another element is how much this will affect the price offered by BHP. They may have to push it up to somewhere in-between the existing share price of Potash and the $130 bid.
Showing posts with label Intrepid Potash. Show all posts
Showing posts with label Intrepid Potash. Show all posts
Monday, October 18, 2010
Tuesday, October 5, 2010
Potash (NYSE:POT), Intrepid Potash (NYSE:IPI), Agrium (NYSE:AGU) Rated by Gleacher & Co
Gleacher & Co. took rating aim at some fertilizer companies, including Potash (NYSE:POT), Intrepid Potash (NYSE:IPI) and Agrium (NYSE:AGU).
All of the companies had their earnings per share raised by Gleacher, based on the assumption the companies have or will be able to increase prices in 2010 and 2011.
For Potash Corp., which Gleacher maintained a "Neutral" rating, they are expected to increase potash volume as well as have higher nitrogen and DAP prices.
Gleacher said, "We are raising our 2010 EPS to $5.44 from $5.15 and our 2011 EPS estimates to $7.30 from $6.90, primarily to reflect higher DAP and nitrogen prices, as well as higher potash volume. We maintain our Neutral rating and take-over fair value of $160 which represents 14.5X our 2011 EBITDA and 22X 2011E EPS. Risks to our price target include 1) failure of BHP and POT to come to an agreement regarding BHP's bid; 2) volatile crop prices that could dampen buyer sentiment; 3) failure of potash producers to raise prices."
The maintained their "Buy" on Agrium, also basing that on the probability of pricing power for the three major nutrients.
"We are raising our 2010 EPS by $0.02 to $5.11 and our 2011 EPS by $0.95 to $6.65 on higher nitrogen, phosphate and potash price assumptions," they said.
Concerning Intrepid Potash, they consider their valuation already high, so they downgraded them from "Buy" to "Neutral." That was even with the same reasoning they could also have pricing power for their fertilizer and higher volume too.
Gleacher noted, "We are raising our 2010 EPS by $0.08 to $0.54 and our 2011 EPS by $0.15 to $1.15 on higher potash volume and pricing assumptions, as well as higher langbeinite prices. However, at current valuations, we are no longer aggressive buyers of IPI and thus are downgrading our rating."
Intrepid also has limitations because of their regional parameters.
All of the companies had their earnings per share raised by Gleacher, based on the assumption the companies have or will be able to increase prices in 2010 and 2011.
For Potash Corp., which Gleacher maintained a "Neutral" rating, they are expected to increase potash volume as well as have higher nitrogen and DAP prices.
Gleacher said, "We are raising our 2010 EPS to $5.44 from $5.15 and our 2011 EPS estimates to $7.30 from $6.90, primarily to reflect higher DAP and nitrogen prices, as well as higher potash volume. We maintain our Neutral rating and take-over fair value of $160 which represents 14.5X our 2011 EBITDA and 22X 2011E EPS. Risks to our price target include 1) failure of BHP and POT to come to an agreement regarding BHP's bid; 2) volatile crop prices that could dampen buyer sentiment; 3) failure of potash producers to raise prices."
The maintained their "Buy" on Agrium, also basing that on the probability of pricing power for the three major nutrients.
"We are raising our 2010 EPS by $0.02 to $5.11 and our 2011 EPS by $0.95 to $6.65 on higher nitrogen, phosphate and potash price assumptions," they said.
Concerning Intrepid Potash, they consider their valuation already high, so they downgraded them from "Buy" to "Neutral." That was even with the same reasoning they could also have pricing power for their fertilizer and higher volume too.
Gleacher noted, "We are raising our 2010 EPS by $0.08 to $0.54 and our 2011 EPS by $0.15 to $1.15 on higher potash volume and pricing assumptions, as well as higher langbeinite prices. However, at current valuations, we are no longer aggressive buyers of IPI and thus are downgrading our rating."
Intrepid also has limitations because of their regional parameters.
Friday, September 24, 2010
Mosaic (NYSE:MOS), Agrium (NYSE:AGU), Intrepid (NYSE:IPI) Now Covered by Susquehanna
Susquehanna took aim at the fertilizer industry, initiating coverage on Mosaic Co. (NYSE:MOS), Agrium (NYSE:AGU), and Intrepid Potash (NYSE:IPI).
On Mosaic, they were started off with a "Positive" rating, with a price target of $76 on them.
Susquehanna noted that Mosaic is the largest producer of phosphate in the world, and second in the world for potash. They believe the potash segment of the company is underestimated by investors.
For Agrium, coverage also launched with a "Positive" rating, with a 12-month price target of $96 on them.
Susquehanna especially likes the diversity of the company, and considers them one of the better ways to get exposure to increasing healthy agricultural fundamentals.
They said, Agrium the "most diversified way to gain exposure to rapidly improving agricultural fundamentals."
Along with fertilizer, Agrium is also a top U.S. distributor of seeds and chemicals for crop protection.
Intrepid Potash has coverage initiated with a "Neutral," mostly on concerns over their ability to compete because of the regional focus of the business, which is a strength and weakness.
The strength of being a regional company is the ability to deliver potash a lower cost to local markets. But their weakness is the potential strategies of their larger competitors to go head to head in pricing if they choose.
They have a price target on the company of $26.
Susquehanna expects Intrepid Potash to increase by 94 percent its 2011 potash segment EBITDA, with estimates they'll rise as high as $164 million.
On Mosaic, they were started off with a "Positive" rating, with a price target of $76 on them.
Susquehanna noted that Mosaic is the largest producer of phosphate in the world, and second in the world for potash. They believe the potash segment of the company is underestimated by investors.
For Agrium, coverage also launched with a "Positive" rating, with a 12-month price target of $96 on them.
Susquehanna especially likes the diversity of the company, and considers them one of the better ways to get exposure to increasing healthy agricultural fundamentals.
They said, Agrium the "most diversified way to gain exposure to rapidly improving agricultural fundamentals."
Along with fertilizer, Agrium is also a top U.S. distributor of seeds and chemicals for crop protection.
Intrepid Potash has coverage initiated with a "Neutral," mostly on concerns over their ability to compete because of the regional focus of the business, which is a strength and weakness.
The strength of being a regional company is the ability to deliver potash a lower cost to local markets. But their weakness is the potential strategies of their larger competitors to go head to head in pricing if they choose.
They have a price target on the company of $26.
Susquehanna expects Intrepid Potash to increase by 94 percent its 2011 potash segment EBITDA, with estimates they'll rise as high as $164 million.
Friday, August 20, 2010
Rumors of Potash (NYSE:POT) Bidding War Going Viral
Ever since the $130-a-share offer for Potash Corp. of Saskatchewan Inc. (NYSE:POT) by BHP Billiton (NYSE:BHP), rumors have skyrocketed concerning an inevitable bidding war that is about to emerge.
Major mining company competitors of BHP like Rio Tinto (NYSE:RTP) and Vale (NYSE:VALE) have been mentioned as possible suitors, although the likelihood of a state-owned business would probably be the biggest competitor to BHP.
China is one of the more obvious choices there, as they consume about 30 percent of the fertilizer in the world, and owning Potash would be a huge win for them.
Russia has also been mentioned as a possible suitor, although they would probably have trouble competing against China, or some of the giant mining companies.
One dark-horse in the possible bidding war could be India, who has a strong need for fertilizer as well, and may have the resources to compete with a Chinese bid.
If this bidding war does ensue, it will be bad news for investors who want to invest in Potash, as it is probably already overvalued from the BHP bid.
But for Potash shareholders, it's a golden opportunity to really make some big profits if the bidding war becomes a reality.
Investors will also have to be careful of the other fertilizer companies, which have moved up in price as an overall sector, and are without a doubt overvalued. The assumption is if Potash of Saskatchewan is a target, eventually the others will be too once a winner emerges and takes ownership of Potash.
Stocks like Agrium (NYSE: AGU), Intrepid Potash (NYSE:IPI) and CF Industries (NYSE:CF) did shoot up on the offer for Potash, but they're starting to come back to earth again, although they're sure to shoot up again if other bids for Potash come about.
Major mining company competitors of BHP like Rio Tinto (NYSE:RTP) and Vale (NYSE:VALE) have been mentioned as possible suitors, although the likelihood of a state-owned business would probably be the biggest competitor to BHP.
China is one of the more obvious choices there, as they consume about 30 percent of the fertilizer in the world, and owning Potash would be a huge win for them.
Russia has also been mentioned as a possible suitor, although they would probably have trouble competing against China, or some of the giant mining companies.
One dark-horse in the possible bidding war could be India, who has a strong need for fertilizer as well, and may have the resources to compete with a Chinese bid.
If this bidding war does ensue, it will be bad news for investors who want to invest in Potash, as it is probably already overvalued from the BHP bid.
But for Potash shareholders, it's a golden opportunity to really make some big profits if the bidding war becomes a reality.
Investors will also have to be careful of the other fertilizer companies, which have moved up in price as an overall sector, and are without a doubt overvalued. The assumption is if Potash of Saskatchewan is a target, eventually the others will be too once a winner emerges and takes ownership of Potash.
Stocks like Agrium (NYSE: AGU), Intrepid Potash (NYSE:IPI) and CF Industries (NYSE:CF) did shoot up on the offer for Potash, but they're starting to come back to earth again, although they're sure to shoot up again if other bids for Potash come about.
Tuesday, August 17, 2010
Potash (NYSE:POT) Shares Skyrocket by Saying "NO" to BHP (NYSE:BHP)
Shares of Potash Corp. of Saskatchewan Inc. (NYSE:POT) after saying no to a takeover bid from BHP Billiton Ltd. (NYSE:BHP), which valued the company at $38.49 billion.
Potash rose to $141.86, gaining a huge $29.71 or 26.49 percent as of 2:09 PM EDT. That brought the market cap of the fertilizer company up to 42.14 billion, calling the bid from BHP "grossly inadequate.".
The bid from BHP was a 16 percent premium over their close on Monday.
Rejecting the offer was a big plus for Potash, with investor response suggesting another higher offer could be waiting in the wings.
Major fertilizer companies moved up on the rejection as well, with CF Industries (NYSE:CF), Mosaic (NYSE:MOS), Agrium (NYSE:AGU)and Intrepid Potash (NYSE:IPI) all jumping by close to 5 percent or more.
The jump was from the feeling the overall sector is undervalued at this time and could be poised for a breakthrough, although that must be based on the realities of demand from economic conditions and not because they're down from a tight market.
President and CEO Bill Doyle said on a conference call with analysts that he didn't necessarily oppose selling the company, but said the "timing of the proposal is highly opportunistic and an ill-disguised attempt" to push up the share price of Potash before coming in with a higher offer later.
Doyle added his is "opposed to a steal of the company."
Confirmation has come from BHP Billiton that they have approached Potash concerning entering into discussions on the matter.
Potash rose to $141.86, gaining a huge $29.71 or 26.49 percent as of 2:09 PM EDT. That brought the market cap of the fertilizer company up to 42.14 billion, calling the bid from BHP "grossly inadequate.".
The bid from BHP was a 16 percent premium over their close on Monday.
Rejecting the offer was a big plus for Potash, with investor response suggesting another higher offer could be waiting in the wings.
Major fertilizer companies moved up on the rejection as well, with CF Industries (NYSE:CF), Mosaic (NYSE:MOS), Agrium (NYSE:AGU)and Intrepid Potash (NYSE:IPI) all jumping by close to 5 percent or more.
The jump was from the feeling the overall sector is undervalued at this time and could be poised for a breakthrough, although that must be based on the realities of demand from economic conditions and not because they're down from a tight market.
President and CEO Bill Doyle said on a conference call with analysts that he didn't necessarily oppose selling the company, but said the "timing of the proposal is highly opportunistic and an ill-disguised attempt" to push up the share price of Potash before coming in with a higher offer later.
Doyle added his is "opposed to a steal of the company."
Confirmation has come from BHP Billiton that they have approached Potash concerning entering into discussions on the matter.
Thursday, August 5, 2010
Intrepid Potash (NYSE:IPI) Misses Earnings, Revenue Numbers
Intrepid Potash, Inc (NYSE:IPI) reported its second quarter earnings, and they missed both earnings and revenue estimates, on poor industrial sales in the Rocky Mountain region.
Executive chairman of the board Bob Jornayvaz said, "Our agricultural potash sales in the quarter were in line with our expectations and we saw consistent demand from our feed customers. Our industrial sales volumes, while up 43 percent from the same period a year ago, have not returned as expected in the Rocky Mountain region, a situation that we are addressing by adding a new compaction facility at our Moab plant."
Earnings dropped to $3.6 million, or $0.05 a share from $14.44 million, or $0.19 a share last year. Adjusted net income fell from $17.43 million last year to $3.75 million in the latest quarter.
Analysts had expected earnings of $0.12 a share on the quarter.
Revenue plunged from $73 million in the same quarter last year to $64.3 million this year. Analysts were looking for revenue to come in at $65.6 million.
Executive chairman of the board Bob Jornayvaz said, "Our agricultural potash sales in the quarter were in line with our expectations and we saw consistent demand from our feed customers. Our industrial sales volumes, while up 43 percent from the same period a year ago, have not returned as expected in the Rocky Mountain region, a situation that we are addressing by adding a new compaction facility at our Moab plant."
Earnings dropped to $3.6 million, or $0.05 a share from $14.44 million, or $0.19 a share last year. Adjusted net income fell from $17.43 million last year to $3.75 million in the latest quarter.
Analysts had expected earnings of $0.12 a share on the quarter.
Revenue plunged from $73 million in the same quarter last year to $64.3 million this year. Analysts were looking for revenue to come in at $65.6 million.
Thursday, July 8, 2010
Potash (NYSE:POT), Mosaic (NYSE:MOS), Agrium (NYSE:AGU), CF Industries (NYSE:CF) and Intrepid Potash (NYSE:IPI) Move Up with Fertilizer Sector
Potash Corp of Saskatchewan (NYSE:POT), The Mosaic Company (NYSE:MOS), Agrium (NYSE:AGU), CF Industries (NYSE:CF) and Intrepid Potash (NYSE:IPI) continue to move up with the fertilizer sector.
Others participating in the benefits of the move today have been China's Yongye (NYSE:YONG) and Converted Organics (NASDAQ:COIN).
There really isn't any news that is pushing the stocks up other than the broader market and possibly some bargain hunting.
Since March the fertilizer sector has been punished, and just over the last five days has there been a rebound.
All the stocks mentioned above are up in today's trading. For the majors listed in the first paragraph, they have all been moving up over the last five trading days.
Others participating in the benefits of the move today have been China's Yongye (NYSE:YONG) and Converted Organics (NASDAQ:COIN).
There really isn't any news that is pushing the stocks up other than the broader market and possibly some bargain hunting.
Since March the fertilizer sector has been punished, and just over the last five days has there been a rebound.
All the stocks mentioned above are up in today's trading. For the majors listed in the first paragraph, they have all been moving up over the last five trading days.
Tuesday, July 6, 2010
Mosaic (NYSE:MOS) Potash (NYSE:POT), Syngenta (NYSE:SYT) Intrepid Potash (NYSE:IPI) Will Remain Under Pressure
Fertilizer companies Mosaic (NYSE:MOS) Potash Corp. (NYSE:POT), Syngenta AG (NYSE:SYT) and Intrepid Potash, Inc. (NYSE:IPI) will continue to remain under pressure for now, as there's nothing in the short term which will generate demand for their products beyond current levels.
Like with other commodity companies though, these companies will definitely be a good long term play, as ultimately the demand for food in countries around the world will result in increased demand for fertilizers to grow the crops needed to supply the world with that food.
For now though, austerity is reigning, and until that changes, countries and farmers will continue to pay close attention to costs and pay only what makes sense to them, which will keep downward pressure on fertilizer prices.
That won't be sustainable over the long term, but until the global economic picture improves, that will be the way of life for these fertilizer companies.
Like with other commodity companies though, these companies will definitely be a good long term play, as ultimately the demand for food in countries around the world will result in increased demand for fertilizers to grow the crops needed to supply the world with that food.
For now though, austerity is reigning, and until that changes, countries and farmers will continue to pay close attention to costs and pay only what makes sense to them, which will keep downward pressure on fertilizer prices.
That won't be sustainable over the long term, but until the global economic picture improves, that will be the way of life for these fertilizer companies.
Saturday, May 22, 2010
Intrepid Potash (NYSE:IPI) CEO Role Changed
Intrepid Potash (NYSE:IPI) has done a few changes at the top of its executive ranks, naming CEO Robert P. Jornayvaz III as executive chairman of the board, while also changing his CEO designation and role to principal executive officer.
In a statement, the company said, "This transition of duties will permit Jornayvaz to focus on strategic matters for Intrepid, especially matters relating to long-term corporate growth opportunities, sales and marketing, mineral leasing and government affairs."
Also promoted near the top was David W. Honeyfield, who was executive vice president, and now is the president of the company, although he'll continue to serve as chief financial officer, treasurer and secretary.
Intrepid's chief technology officer Hugh E. Harvey Jr., was promoted to executive vice chairman of the board. He had been a board member before, and will evidently leave his former position.
In a statement, the company said, "This transition of duties will permit Jornayvaz to focus on strategic matters for Intrepid, especially matters relating to long-term corporate growth opportunities, sales and marketing, mineral leasing and government affairs."
Also promoted near the top was David W. Honeyfield, who was executive vice president, and now is the president of the company, although he'll continue to serve as chief financial officer, treasurer and secretary.
Intrepid's chief technology officer Hugh E. Harvey Jr., was promoted to executive vice chairman of the board. He had been a board member before, and will evidently leave his former position.
Monday, May 10, 2010
Intrepid Potash (NYSE:IPI) Investor Day
Intrepid Potash (NYSE:IPI) announced in a press release they're going to host an institutional investor and analyst meeting in Englewood, Colorado on Wednesday, June 16, 2010, from 1:30 p.m. to 4:30 p.m. MDT at the Inverness Hotel and Conference Center.
The largest producer of potash in the United States, Intrepid Potash said some of the topics covered by its executives include the overall market outlook, corporate strategy and opportunities for organic growth.
For those wanting more information, they can contact investor relations via email at investor@intrepidpotash.com, or they can call the company at 303-296-3006.
There will be a webcast available live and replay at www.intrepidpotash.com.
The largest producer of potash in the United States, Intrepid Potash said some of the topics covered by its executives include the overall market outlook, corporate strategy and opportunities for organic growth.
For those wanting more information, they can contact investor relations via email at investor@intrepidpotash.com, or they can call the company at 303-296-3006.
There will be a webcast available live and replay at www.intrepidpotash.com.
Friday, May 7, 2010
CF Industries (NYSE:CF) Revenue Down in First Quarter
CF Industries (NYSE:CF) had a poor first quarter and earnings came in at a net loss of $4.4 million, or 9 cents a share, compared to $62.7 million, or $1.28 a share last year in the same quarter.
Revenue plunged to $502.4 million, a 26 percent drop.
In contrast, major rival Intrepid Potash (NYSE:IPI) had their profits in the first quarter increase by 21 percent.
Guidance for the next quarter has CF revenue estimated to rise strongly.
Revenue plunged to $502.4 million, a 26 percent drop.
In contrast, major rival Intrepid Potash (NYSE:IPI) had their profits in the first quarter increase by 21 percent.
Guidance for the next quarter has CF revenue estimated to rise strongly.
Friday, April 30, 2010
Potash (TSE:POT), Intrepid Potash (NYSE: IPI), Agrium (TSE:AGU), Mosaic (NYSE:MOS), CF Industries (NYSE:CF) Look Strong
Potash (TSE:POT)(NYSE:POT), Intrepid Potash (NYSE: IPI), Agrium (NYSE:AGU)(TSE:AGU), Mosaic (NYSE:MOS) and CF Industries (NYSE:CF) should perform strongly in the months ahead, as the overall agricultural chemicals sector looks strong, based on corn demand.
Other agricultural chemicals companies should do well too, but this is just a sampling of some companies poised for growth.
Two major factors are the foundation for this assertion, and one is the price of gas, which has risen to the point where growing corn for ethanol could be profitable again, and the measured nutrient levels of soils are down, meaning corn will need a hefty dose to perform well, and the farmers will make sure they get it.
This should increase the price of fertilizer for the buying period of June through September, which ultimately should push the share prices of the agricultural chemicals companies up with them.
Other agricultural chemicals companies should do well too, but this is just a sampling of some companies poised for growth.
Two major factors are the foundation for this assertion, and one is the price of gas, which has risen to the point where growing corn for ethanol could be profitable again, and the measured nutrient levels of soils are down, meaning corn will need a hefty dose to perform well, and the farmers will make sure they get it.
This should increase the price of fertilizer for the buying period of June through September, which ultimately should push the share prices of the agricultural chemicals companies up with them.
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