Itafos (IFOS.V)

IFOS operates as a producer of specialty chemicals such as phosphate and specialty fertilizer. IFOS’s results over the years have been quite cyclical, though the company demonstrates organic growth over the full cycle. IFOS is trading cheaply at 5.2x Forward P/E with a trailing-twelve-month yield of 7.4%. The company announced its very first dividend since going public in 2025. With that said, the dividend payment could change if the downturn meaningfully impacts free cash flow. Based on consensus estimates, IFOS’s results are expected to decline slightly by 4% in 2026 before resuming growth the year after.

Overall, IFOS looks cheap, but given its highly volatile operating history, we think the name could look interesting but would size the position very conservatively.
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Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. They have been growing their top-line quickly over the last quarters. Net profit margins are improving. Although debt is quite elevated, they have cash balances and equity positions that are decent. Valuation is cheap and future growth estimates are good.A smaller size so could see higher volatility. Unlock Premium - Try 5i Free

This is a pure play in phosphate. It does mining and processing. He sees it as a special situation, likely to be taken over. Their original investment was a plant in Brazil, backed by Cargills. Then they purchased Conda Phosphate from Agrium as part of Agrium’s merger divestitures. This makes sense for Itafos because it has other projects nearby. If there is an ag cycle, this will be the go-to small cap name. (Analysts’ price target is $4.00)

This produces fertilizers based on phosphate rather than potash. This has consolidated three projects including a mine in Brazil and a plant that it purchased very cheaply from Potash before its merger with Agrium. The price of phosphate collapsed but is now coming back. He sees this as a great growth story for the next up-cycle in agriculture. (Analysts’ price target is 3.90$)

If you invest in this, it is like buying a lottery ticket. They are looking at strategic alternatives, so every week they come out with announcements. Currently working with a company that may move in and take them over. That company has lent them a little money, although the interest rate is 15%. Right now the mines are not operating. Lost about $100 million in the last 9 months.

There has been a lot of insider buying, which is always a good sign. They’ve go into small deserted gold mines and chemically treat them in order to extract potash. Roads have already been built, so infrastructure is already there. Very low liquidity, so highly volatile.

Your thoughts on its Brazilian properties, as a long-term investment. One of the 1^st concerns on Brazilian properties is pricing which has had a tremendous run up. There are companies, such as Adecoagro SA (AGRO-N) which have better risk adjusted trades on agriculture and farm land. Great country to invest in for the next 20 years, but is becoming a more challenging environment for Brazilian farmland.

(Market Call Minute.) Good Brazilian name. Fully financed. Good group of assets.