Sunday, August 17, 2014

Potash (POT) - for long-term "food" future

Company Profile: 
Potash Corporation of Saskatchewan Inc. (US stock quote POT), together with its subsidiaries, produces and sells fertilizers and related industrial and feed products worldwide. It mines and produces potash, which is primarily used as fertilizer. The company also offers solid and liquid phosphate fertilizers; animal feed supplements; purified phosphoric acid, which is used in food products and industrial processes; hydrofluosilicic acid; and silicon tetrafluoride. In addition, it produces nitrogen fertilizers and nitrogen feed, as well as industrial products, including ammonia, urea, nitrogen solutions, ammonium nitrate, and nitric acid.

The company owns and operates five potash mines in Saskatchewan and one potash mine in New Brunswick. It holds the right to mine 769,260 acres of land in Saskatchewan; and 58,263 acres of land in New Brunswick in Canada. The company sells its fertilizers to retailers, dealers, cooperatives, distributors, and other fertilizer producers, as well as industrial products primarily to chemical product manufacturers.

Potash is the world's largest producer of potash and the third-largest producer of phosphates and nitrogen. Its production facilities are among the lowest-cost potash operations in the world.  Fertilizers are essential for obtaining higher yield from food crops.

Financials & Outlook: 
Last traded = US$35.02
Market Capital = US$29.04B
Current P/E = 19.35
P/S = 4.77
Dividend Yield = 3.6%
Beta = 1.03
The technicals show strong support at about US$30.

I rate it a buy at current price.

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