What do think of buying Potash now?....RUDY
Best Answer
3963 points
MNSL answered one year ago …
I agree with HoughtonAndAtkeson.
It all depends on what type of investor you are. Long-term investors will try to accumulate quality stocks especially period like today. Even short term investors who can identify market trend can take positions accordingly.
Definitely there will be long term value for the above stocks. In the case of Potash it is better to accumulate in weakness. Sooner than later bottom will reach for this stock.
This is the time to invest in next rotating sectors and in quality stocks.
Answers
190 points
HoughtonAndAtkeson answered one year ago …
Potash is a critical ingredient for fertilizer, and the need for growing food is certain in the midst of a growing population, so potash is a noteworthy industry. However, we found another long candidate in Intrepid Potash (IPI).
In 2009, the company plans to increase its production capacity by about 15%. Sell-side analysts expect the company's earnings to be about $5 next year. IPI is currently trading at about $21.50, or about four times earnings per share.
The good news for existing companies is that the potash mining business has huge barriers to entry. It costs about $2.5 billion and takes 5-7 years to open a mine. In a world where credit is tightening, this company should be free of new competition for the foreseeable future. Intrepid also has a price advantage because its transportation costs are below industry average.
Our bet is that the strong company fundamentals, low valuation and slow-down in forced selling by hedge funds will help Intrepid appreciate in the long term.
