Two Fertilizer Stocks Priced to Move
It has been a tough 12 months for investors in fertilizer stocks. The sector has consistently underperformed the overall market for the most part of a year (see chart below). These stocks have recently started to make a significant move up, however. The long-term secular trend of increasing demand for food in the developing world, as well as low natural gas prices (a major cost input), are still in place.
I believe the analyst community has been a bit too pessimistic about phosphate and potash pricing. This was demonstrated earlier this week when The Mosaic Co. (MOS) reported earnings that were a few cents ahead of estimates. More importantly, the prices Mosaic received for its production of potash and phosphate were both above the range analysts had previously estimated. Agrium Inc. (AGU) also raised its earnings forecast substantially Wednesday. This bodes well for the overall sector, and it will outperform the market in the coming months. Let's look at two fertilizer stocks in my portfolio....328 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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