Investors See Growth From Potash

How will investors respond to Potash’s upcoming release?

| More on:
The Motley Fool

On Thursday, Potash (TSX:POT,NYSE:POT) will release its latest quarterly results. The key to making smart investment decisions on stocks reporting earnings is to anticipate how they’ll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you’ll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.

Potash rose to prominence in the initial boom of the agricultural industry during 2007 and 2008.  After recovering much of the ground it lost due to the financial crisis, competitive pressures within the fertilizer industry have held it back over the past couple of years.

With those pressures now beginning to fade, will the company get back to its winning ways? Let’s take a look at what’s expected in its quarterly report.

Analyst EPS Estimate $0.59
Change From Year-Ago EPS 5.4%
Revenue Estimate $1.82   billion
Change From Year-Ago Revenue 11.1%
Earnings Beats in Past 4 Quarters 0

Source: Yahoo! Finance.

Will Potash finally beat expectations?
Analysts have significantly lowered the bar for Potash over the past few months, cutting first-quarter EPS estimates by a dime per share and full-year 2013 consensus figures by almost $0.20 per share. The stock has been hurt by these downward revisions, falling more than 6% since mid-January.

Much of the pessimism about Potash has been derived from two factors. Slower growth in key fertilizer markets like China and India have caused the commodity price to fall and lower prices for natural gas have encouraged greater use of nitrogen-based fertilizers.  Nitrogen-fertilizer producers are benefiting at the expense of Potash.

Foolish Takeaway

In Potash’s report, watch for how the company’s sales have responded to prices on various crops. By now, reliable figures on spring plantings should give Potash a greater ability to predict demand for the coming season, and that will give investors a better picture of what the immediate future holds for the fertilizer producer.

Potash is just one of a bevy of resources that Canada is endowed with.  Uranium is another.  While potash will help feed the world, uranium has the potential to be the fuel that powers the 21st century.  And currently the market is completely ignoring it.  Click here now for instant access to our FREE report titled “Two Uranium Stocks To Fuel Your Portfolio’s Return”.  We think you’ll be surprised just how bright the future is for uranium, just how far these two Canadian names have fallen, AND how fast they could rebound.  Click here now to access this free report, and hop on for the nuclear ride of your life!

Follow us on Twitter and Facebook for the latest in Foolish investing.

Fool contributor Iain Butler is short $40 July 2013 puts on Potash and owns shares in Potash outright.  The Motley Fool does not own shares in the companies mentioned. 

A version of this article, written by Dan Caplinger, originally appeared on

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

More on Investing

calculate and analyze stock
Bank Stocks

Better Than Banks: Why goeasy Is 1 of the Best Stocks to Buy Now

Bank stocks are typically excellent long-term investments, but right now, this growth stock is so cheap that it's one of…

Read more »

Female hand holding piggy bank. Save money and financial investment
Dividend Stocks

RRSP Savings: 2 Top TSX Dividend Stocks to Build Retirement Wealth

Here's how investors can turn small initial RRSP contributions into substantial savings for retirement.

Read more »

question marks written reminders tickets

Is Restaurant Brands International (TSX:QSR) Stock a Good Value Pick?

Consumer discretionary stocks like QSR could be good buys right now.

Read more »

Man holding magnifying glass over a document
Dividend Stocks

2 BMO ETFs Are Less Volatile Than BMO Stock

Two ETFs of a big bank are more suitable for risk-averse or ultra-conservative investors than its stock.

Read more »

gold stocks gold mining
Metals and Mining Stocks

3 Discounted Gold Stocks to Buy Now

Gold stocks, especially at their current discounted state, can be promising short-term investments, since they can reverse course anytime due…

Read more »

Gold bullion on a chart
Metals and Mining Stocks

Why TSX Gold Stocks Are Falling in May 2022

Will TSX gold stocks shine in the second half of 2022?

Read more »

grow money, wealth build

2 Profitable Growth Companies I’d Buy Right Now

Alimentation Couche-Tard (TSX:ATD) and Enbridge (TSX:ENB)(NYSE:ENB) stocks are cheap earnings growers that long-term investors should look to buy.

Read more »

Happy Retirement” on a road

Retirement Investors: 2 Oversold Stocks With Great Dividend Growth

Stocks with strong track records of dividend growth deserve to be on your retirement radar.

Read more »