Investors See Growth From Potash

How will investors respond to Potash’s upcoming release?

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 Fool.com

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

coins jump into piggy bank
Dividend Stocks

How to Use Your TFSA to Earn $1,057/Year in Tax-Free Income

Investing $5,000 in each of these high-yield dividend stocks can help you earn over $1,057 per year in tax-free income.

Read more »

data analyze research
Tech Stocks

Is BlackBerry (TSX:BB) a Buy in May 2025?

While its recent downturn might not look pretty, it might be the best opportunity to buy BlackBerry (TSX:BB) stock and…

Read more »

Piggy bank with word TFSA for tax-free savings accounts.
Investing

Where I’d Invest the New $7,000 TFSA Contribution Limit in 2025

If you have $7,000 for the new TFSA contribution increase, here are three stocks I would contemplate adding to the…

Read more »

open vault at bank
Bank Stocks

2 Banking Stocks I’d Buy With $7,000 Whenever They Dip in Price

Two banking stocks are worth buying on the dip and as reliable passive-income providers.

Read more »

Paper Canadian currency of various denominations
Investing

How I’d Invest $7,000 in Financial Sector Stocks for Stability

This Canadian financials ETF may stay insulated from Trump's tariffs.

Read more »

Man in fedora smiles into camera
Dividend Stocks

How I’d Build a $20,000 Retirement Portfolio With These 3 TSX Dividend All-Stars

If you're worried about returns and want to focus on dividends, these dividend stocks are the first to consider.

Read more »

View of high rise corporate buildings in the financial district of Toronto, Canada
Dividend Stocks

If I Could Only Buy and Hold a Single Canadian Stock, This Would Be It

Here's why this high-quality defensive growth stock is one of the best Canadian companies to buy now and hold for…

Read more »

dividends can compound over time
Dividend Stocks

3 Canadian Market Leaders Where I’d Invest $10,000 for Sustained Performance

Market leaders like Alimentation Couche-Tard Inc (TSX:ATD) are worth an investment.

Read more »