PotashCorp (POT.TO) Buy, Sell or Hold

PotashCorp (POT.TO)

0.00

-0.00 (0.00%)

173 watching

WATCH

Looks like it is holding its support level at the 200 day moving average. If there were more volume, there would be more clarity. Wait for an upside move. Watch the MACD and some accompanying volume.

BUY ON WEAKNESS

Near term, he expects a pullback. They can start to grow into their earnings and next year's earnings should be better. You are buying a future stream of earnings. Would be comfortable owning it about 8X earnings as opposed to 10X or 12X where they are trading now. Could pullback another 20%. Expects flat money in the next year.

DON'T BUY

This has been overvalued for quite some time. The model price is $159.39, a negative differential of 11%.

COMMENT

All of the resource stocks have pulled back into the most recent consolidation that took place between March and April. So long as they can maintain the higher highs and higher lows, it's a matter of how much you can bear. He sold his holdings and would like to see some real strength before re-entering.

PARTIAL BUY

Not a Top Pick, but it very well could have been. Given the uncertainty in the market, you could take a half position and take the other half later on. Definite long term Buy.

HOLD

Dominates the Canadian agricultural market. Thinks it will swirl around $20 up and $20 down.

COMMENT

This is about food and there are a lot of problems in the food cycle. There is only 1.5 months supply of grain globally. Potash is natural fertilizer. Earnings should continue.

HOLD

The last news was a fairly large development of more potash. There will be bouts of profit taking from time to time but as long as there continues to be demand for fertilizers this will be on track. It will take a couple of years for other competitors to step in. Fundamentals are still in place.

BUY ON WEAKNESS

Earnings are still in an uptrend. You stay with a commodity stock as long as there is an uptrend. Prefers buying below $200.

COMMENT

Likes the agricultural sector. (See Top Picks,) Good stock but he prefers Agrium (AGU-T). Looking for very strong earning gains in Q2 that will drive the stock to new highs in the relatively short term. Demand for fertilizers will continue to rise long term.

BUY

With food inflation there comes a demand for higher yields. Those demands are global. Potash (POT-T) and Agrium (AGU-T) are in enviable positions because there is very limited supply currently and they have pricing power. (Also likes Mosaic (MOS-N).)

BUY ON WEAKNESS

Vulnerable in the short term but longer term this is a great company. Diversified product mix. Good global exposure. $210 would be a better entry point.

COMMENT

If you are a momentum player, it might be of interest to you. As a contrarian player, he has absolutely no interest in this kind of company. Risk/reward ratio is not good enough for him.

DON'T BUY

Agricultural stories are very old ones and he doesn't like old stories. You want to arrive at parties early and this one started 2 or 3 years ago. Currently at the top of its channel and you want to get involved at the bottom of the channel. The danger is, the lower channel it eventually gets broken. Would be careful and let it settle down a bit.

DON'T BUY

(See comment “Agriculture”.) The easy money has been made.

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PotashCorp (POT.TO)