PotashCorp (POT.TO)

There is a massive oversupply in the commodity. Doesn’t see the price of potash recovering over the next three years. The dividend is safe, however. You could wait 3 to 5 months out to buy.

Last April all these companies now have covered the gap. But good news today did not help. Thinks there is market weakness coming. Bigger picture you want to own the company, but wait 3-5 months for lower levels.

Just announced that the CEO is stepping down July 1. Chart is showing a nice long-term trend. Risk/reward is really good right here. There is support coming in at around $35. This area of the market should be good right through to June.

Prefers Agrium (AGU-T) for her clients. Potash prices have come down. This company cuts back on production to keep prices at a certain level. We are seeing some Chinese buying returning to the market. She would like to see how the spring planting season unfolds.

Likes Potash. The population in the world is growing and we need ways to feed people. He believes in the sector. This or AGU-T are both stocks in the long run. It is about managing the volatility in the mean time. In the next months maybe we get a pullback to $36, but there is no reason to sell it.

Prices are very seasonal in nature and coming into the summer we are heading towards the end of that uptick. Because of this, you are going to definitely see this and Mosaic (MOS-N) lead this group with some earnings beats. Probably not a bad idea, when the next earnings come out, to take some money off the table and, potentially, look to switch it into Agrium (AGU-T). This will give you a little more diversified business model.

Defied the odds. Everybody thought it was the end of the world when the cartel broke up, but it turned out to be a buying opportunity. Recently sold his holdings because he found better opportunities. Doesn’t know how much higher it can go until things resume and normalize.

He has a different top pick in the Ag space. Ukraine situation has changed his view toward the Ag area. Potash is under the gun and stock price doing better than the commodity price. Ukraine aside, you can see potash prices starting to bottom and go back up. Keep an eye on POT if you own it.

For a 3-5 year horizon, does the caller need to worry? This is a tough one. He probably falls into the camp of being one of the people who would be more cautious on it. There is a lot of potash globally. For decades, the market was in oversupply, because too much money had been spent developing mines in the 70s. There was a perpetual glut. All of a sudden we came into a decade of a sweet spot where you had cartels that controlled supplies. He felt that where the prices got to in 2008-2009 was unsustainable.

Normally the seasonality for this company is from October right through until early January. However, the technicals are very intriguing. Chart shows it is in an upper trend, outperforming the Canadian market and trading above its 20 day moving average.

(A Top Pick July 4/13. Down 3.2%.) A great cash machine. Potash prices seem to be hitting a floor at $300. The CapX they did is pretty well done. Starting in 2015, only $800 million a year is going for maintenance. They don’t need to build anymore capacity. Dividend is covered through earnings and he can see the growth going quite nicely through 2015-2017. Has an impeccable balance sheet.

The premium potash producer. Likes this company as being a leader in the space but there have been some changes in the way the market works. Thinks the situation has improved somewhat as pricing has stabilized in the low $300 level. The issue right now is we really need to see demand pick up. This company is in a holding pattern and they just have to manage through the downturn.

(A Top Pick Jan 17/13. Down 8.37%.) Stock has started to recover and is up 16% in the last 6 months. He continues to hold this but there are margin pressures on farmers and he is not sure the fertilizer space in the very near term is going to be extremely strong.

Is this okay for a 3-5 year horizon? On a longer-term basis, you should be fine. When the cartel broke up, he was surprised the stock didn’t come lower. Earnings estimates have been slack. When you start throwing more bad news at a stock, and it stops going down, that is the time to Buy. He prefers Agrium (AGU-T) because of its diversity and that it is more vertically integrated.

Switching from iShares Agriculture ETF (COW-T) to Potash (POT-T)? COW-T has 7%-8% of Potash in it along with a lot of other companies. You are going to have a lot of risk going from a diversified basket of stocks over to one single stock. However, he thinks there is a little bit of move now on Potash. Chinese have stopped their 1^st quarter buying and he thinks there is a little bit of a bottom on potash prices. The company is doing well. 4.5% yield. Kind of likes Potash here, but wouldn’t be prepared to give up the diversified basket.