PotashCorp (POT.TO)

6% dividend. It has underperformed. It is down about 20% YTD, but you want to own it. We are starting to see a recovery. They are a globally recognized name in that space. He feels potash prices will go up. He would buy at these prices. AGU-T is the more conservative way to play this space.

Potash prices continue to decline along with all the other cyclicals. She would prefer Agrium (AGU-T) because it is a little more diversified and has the retail business as well, which is less cyclical. Potash stock is probably as cheap as it has ever been. This has always been a very expensive stock. She doesn’t see any catalysts to make it attractive in the near term. If you are looking 3-4 years, and this is probably a decent value to start accumulating it. (She owns Agrium.)

Doesn’t think this is a value trap. It is subject to commodity prices, which have been all over the board with respect to fertilizer products. The ramp up of new production has come down dramatically. A couple of mines have been put on the shelf, so he thinks the supply/demand balance will come back more towards Potash’s favour. Doesn’t think there will be a dividend cut imminently as it still has free cash flow to support it, especially since they have curtailed some of their capital projects. Prefers Agrium (AGU-T) because of its diversification.

It has been overvalued for a long time. People remember how highly valued it was and cling to it. The pricing of their product has collapsed. It has no upside from his point of view.

(A Top Pick March 12/14. Up 0.02%.) This is continuing to struggle. An OK story. They are the lowest cost producers globally, which is a good thing. The dividend is good and they are generating lots and lots of free cash. A great core holding in portfolios.

The fertilizer industry seems to be turning a corner. Numbers are better and it looks like the pricing is going to be firmer in the future. Not a bad investment. Thinks the stock was oversold in the last market decline. Feels the dividend is quite safe. Prefers Agrium (AGU-T).

When the commodity collapses, and the industry can withhold supply, it is really hard to figure it out. This has begotten a premium, because it is able to be a lot more monopoly than it is a commodity business. He can’t really figure out what the long-term price of potash is. Just too expensive for him.

For many years this was one of his favourite agricultural picks. A terrific franchise. The world’s leading potash producer. Between them, Mosaic (MOS-N) and Uralkali over in Russia, there was a great deal of expansion done between 2007, where the market was extremely tight, and 2012. Now the industry is reeling from overcapacity. This company is profitable and they are making money, so they can afford their dividend. However, they are not making big money and it is not really growing right now. It is going to be some time before the world finally tightens up the potash market and absorbs the extra capacity.

The story behind this was always a huge great demand growth for food globally and a shortage of potash. They have always been able to match up supply with whatever demand existed. Thinks this will continue to be the situation. You don’t need to own this story.

Look at any commodity out there and they are all hit hard. He likes it for the dividend rates that will do nothing, but go up. They will return a lot of capital to shareholders. They are trying to control supply out there through acquisitions. It is a time to get into it. Look at all the droughts in the Prairies, Western Canada and into the US. Potash is setting up quite nicely here.

Basic materials is a very tough space to be in right now. The group has been under pressure because the pricing power has not been good. Grain prices have been getting a little better recently which is good, but this company is not benefiting much. He would prefer Agrium (AGU-T) which gives you a little bit more diversified footprint and is performing a little bit better on the market.

They made a bid for KNS. They have the balance sheet and cash flow to sustain the dividend. Even if Potash prices stay here they will be able to sustain it. However, if they take on more debt for the acquisition, then he would be more concerned. He has AGU-T.

The dividend is safe and they have growing free cash flow. Over the next couple of years you will see their cash flow streams start to improve. Potash fundamentals are not great. There is a lot coming on stream now. There is uncertainty as to how the potash market is going to develop. She prefers AGU-T.

The dividend is probably safe. He has does not like it and has not owned for some time. He prefers his Top Pick for tonight in the AG space. People are cutting potash prices simply in order to get market share. He would stay away. He likes it long term and it is a necessary resource and in theory should work out well, but for now he would stay away from it.

Hasn’t been a very pretty picture for a while. For a number of years it has been in a downtrend and is currently struggling to break that downtrend. For the time being, he would hold and see if it pulls off through the trend line to the upside. If it breaks down through the last low of about $34-$35, that would be a Sell signal. If you own it, he would stay with it.