PotashCorp (POT.TO) Buy, Sell or Hold

PotashCorp (POT.TO)

0.00

-0.00 (0.00%)

173 watching

BUY

Looking to double production by 2015. If you believe th food inflation story and China’s diets are going to change, it has a 400 year reserve. Wait for a price correction and hold for a long, long time. Wait for $55. Will grow significantly over time.

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BUY

Likes agriculture outlook in general and feels it will continue to be good.

BUY

Stock just split 3 for 1. Loves fertilizer stocks but prefers Agrium (AGU-T) a little better. In world farming, food situation and middle east problems there is a good deal of hunger involved. Fertilizers will be one of the products that will be a good long-term bet.

DON'T BUY

Have not been impressed with free cash flow.

RISKY

It’s volatile, despite a split. This is a good entry point. He is very positive on agricultural sector. He prefers Agrium as it is not a pure potash play and not as volatile..

DON'T BUY

Prefers smaller companies because that is where takeovers are going to happen.

DON'T BUY

Very expensive. His model price is $55, which is 10% below the current price.

PAST TOP PICK

(A Top Pick Jan 14/11. Up 3.2%.) Sell January Calls with a strike of $145 for $3.95.

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TOP PICK

Short February Puts. Last month he got called Potash so he doesn’t own it any more. But he likes Potash so he writes Puts and can Sell naked puts at $160 for $4.95 and makes 3% for the month.

HOLD

Recently did a 3 for 1 stock split. Market leader in fertilizer. Still significant room to grow.

BUY ON WEAKNESS

23X earnings. Thinks it will pull back and he recently sold his holdings. Likes agriculture and owns others.

DON'T BUY

People are very, very excited about the whole food story. POT has a high valuation. He is not sold that it is tremendous value at $60. He would be cautious of a bump in the price in the short term. If pricing cartel starts to break, you could see problems.

COMMENT

If bullish on this, you could Sell a Put, which obligates you to Buy the stock at a certain price, which will have to be margined and require capital. To get around this you Buy a Put at a lower strike price, which limits your risk to the difference between the strike prices.

BUY

Agriculture is a long story. We are only starting to see the increased demand for agriculture chemicals as a result of global food shortages.

BUY

Stock split coming in Feb, which temporarily helps the stock price. Forecast for potash is $500 a ton making this good value. Agriculture is a place to be if you think demand will be strong from emerging markets.

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PotashCorp (POT.TO)