PotashCorp (POT.TO)

Attractively valued. Thinks we have seen a trough in the stock price. Fertilizer prices should rise in response to greater global demand. China is starting to gain a little bit more traction and is probably going to grow at 7.5%-8% this year. India is coming back. Longer-term, earnings from fertilizer companies should move in a more secular bullish phase. Dividend of 2.05%. Strong free cash flow should enable the company to expand capacity.

New contract to sell potash to China and India. This is the only one he owns.

Thinks there is great upside on this. Chart looks terrible but it has recovered a bit. He would like to see the inventory situation stabilizing before buying. Pricing is still in question given what is going on in China. There seems to be some thought that the Chinese will come to the table even this year. India is a question mark for next year. (See Top Picks.)

(Market Call Minute.) Probably a Buy if only because we are going to see better harvests coming forward, and therefore more use of potash.

Loves the theme of food commodity price appreciation, which he thinks will play out over quite a period of years. Prefers Agrium (AGU-T) as a way to play this theme because of the exposure it gives to nitrogen-based fertilizers. Going through some challenges on the pricing front right now because of India and China holding off. Also, expect new players will start producing potash as well.

Anywhere below $40 has been a decent buying opportunity. Going into January, the put would be a good bet. We are not down to the lows of the last couple of years. Short term there is some risk in pot ash. You could roll it down to a $35 put if you are worried.

$51.11 model price as of Friday. It has broken EVB+5 (see his blog). May be a pre-cursor of things to come. He would be very cautious at buying it here even though it is below his model price.

Key question in the short term is the oversupply of potash and the shutdown of various plants. In the meantime, the Chinese and Indians are playing very cute in terms of placing orders for 2013. There are suggestions additional competition is coming in. However, he loves the stock and the whole agricultural space. There is a huge area in Brazil, south and east of the rain forest that is being refurbished and there will be tremendous activity and growing of corn and wheat, etc. Looking out 2-3 years, there is going to be a great demand for potash, phosphate and nitrogen. Great entry point if you are looking out 3 years.

Been an underperformer back to 2011. He would not step into it right now. You could do wave counting (7). That is a monumental decline. A bear will give 3 waves. Something is wrong.

(Market Call Minute) November and October not the time to buy agri.

Trying to acquire the balance of the Israeli company that they have a stake in. Fundamentally, the demand for agriculture is ever increasing. Feels the story for potash is very good as long as the price continues to be at a reasonable rate of $400-$500. Try to get it below $40.

This is the seasonal time to be in this stock and it ends at the end of the year. If you start to see a pickup at this time, that would be quite positive.

Anything below $40 is a buy for him. But if you compare to others in the sector, he doesn't think over the next year you will see a lot of upside. Ok for a trade.

(Market Call Minute.) Always trades at a premium valuation and people are now questioning whether that is justified as they are having a more difficult time controlling the market on potash and controlling prices.

(A Top Pick Oct 20/11. Down 17.09%.) It had looked like we were going to have a lousy corn crop and he thought it would be good for fertilizers. China and India, which are big buyers of potash, decided to rebel against the rising prices. This company has $10 a share in other assets too. Trading at a very, very cheap multiple.