POT

[AussieTrader]

Profile:

Potash Corporation of Saskatchewan Inc. is an integrated fertilizer and related industrial and feed products company. The Company's potash is produced from six mines in Saskatchewan and one mine in New Brunswick. Of these mines, it owns and operates five in Saskatchewan and the one in New Brunswick. Its nitrogen operations involve the production of nitrogen fertilizers and nitrogen feed and industrial products, including ammonia, urea, nitrogen solutions, ammonium nitrate and nitric acid. It has nitrogen facilities in Georgia, Louisiana, Ohio and Trinidad. The Company's phosphate operations include the manufacture and sale of solid and liquid phosphate fertilizers, animal feed supplements and industrial acid, which is used in food products and industrial processes. It indirectly holds all outstanding interests in PCS Joint Venture, Ltd., which formerly manufactured, processed and distributed fertilizer and other agricultural supplies from plants located in Florida and Georgia.
Market Cap: $69.18B
Sector:  Basic Materials – Non Metallic Mining
Website: www.potashcorp.com

Trading Idea:

Fertilizer stocks have been strong for a long period of time and there seems to be no end in sight of the current trend. There are many stocks in this sector which look good, CF, AGU, MOS to name just 3. Continued price increases in food, price increase for Potash (the main ingredient mined for fertilizer), continued positive guidance and sales numbers, strong analyst forecast and growth expectations all point to a reason to be long this long term trend.

Technical Analysis:

POT pulled back to ascending support last week and rebounded once that support was found very strongly. This shows strong buying support for any weakness in this stock and the overall sector. POT is now trading above descending short term resistance and I think looks poised to take out the $240 area highs.

Fundamentals:

POT is pretty much the market leader in the fertilizer field; it has significant institutional backing (75% inst ownership) and analyst coverage. Over the past few weeks there have been various analyst upgrades with price targets ranging from $285 up to $445.
Over the coming days I will provide further fundamental data and analysis, but this company is the leader in one of the strongest non energy sectors out there.

We will introduce a stop in the next few days.

Trading Plan:

Buy POT at or around the open

[AussieTrader]

Update:

POT opened strongly held most of the gains during the day and closed strongly as well. A very bullish outcome as it broke the short term descending resistance.

My plan with the POT trade is to hopefully ride the trend continuation for as long as it remains intact, now it is not a new trend and I have no idea how long it may continue, but that is the nature of the game. The sector, company and overall economy taken together suggest POT and other agriculture / fertilizer companies should continue their upwards trend.

I mentioned previously that POT is the market leader with heavy institutional support (follow the smart money) and analyst following. A few recent price upgrades and market outlooks were issued;

June 24th: POT raised to $335 from $275 by CIBC
June 24th: UBS raises its price target on Potash Corp. of Saskatchewan (POT) from $250 to $285
July 9th: Goldman Sachs analyst predicted potash prices will continue to rise on higher global demand.
July 9th: Canaccord start POT at buy with $425 target

An interesting development, the largest global fertiliser company Yarra International posted Q2 results which were up 300% on strong demand and price increase. They further predicted growth continuation and they also agreed to buy Saskferco Products which owns a Canadian based fertiliser factory for $1.3B. This news acts as a nice guide as to the continued potential in this sector. A full news release can be seen below;

http://www.bloomberg.com/apps/news?pid=20601082&sid=aMuZb_eEC0KU&refer=canada

I will introduce an initial stop for this trade today at $196.80, outside ascending support, medium term averages and just below the July 8th swing low.

Trade Plan:

HOLD POT with STOP at $196.80

[la-onda]

Zacks Earnings Preview:

Potash Corporation of Saskatchewan (NYSE: POT) topped forecasts during the past 2 quarters by an average margin of 20 cents per share. Ahead of the company's second-quarter report, analysts are anticipating another positive surprise from this fertilizer company. The consensus earnings estimate has been revised higher by 7 cents over the past 30 days to $2.54 per share. The most accurate forecast is more bullish at $2.60 per share. Potash is scheduled to report on Thursday, July 24, before the start of trading.

[AussieTrader]

Update:

A very quick update. POT announce Q2 earnings before market open on Thursday 24th July. We will hold through earnings. If you have fears about holding over an earnings period and you have a position in POT then you should decide what course of action to take.

Trade Plan:

Hold POT with Stop at $196.80

[AussieTrader]

Update:

The POT Q2 results and future guidance whichever way you slice it are huge and above consensus:

$2.82 eps v's $0.88c year ago
$2.62B sales v's $1.35b year ago
$886M in gross margins

Increased guidance:
eps projection Q3 $3.25 to $3.75
eps projection 2008 $12 to $13

Well I could go on an on. Now, in any other market environment this stock would be an absolute certainty for huge upside movement, but right now conditions are a lot tougher, the market is rewarding financials for writing down and losing $B's. Commodities are out of favour. To say that makes this very frustrating would be an understatement.

What to do? Well I foresee very volatile trading. I don't want to be selling today whether on some small profit taker or stop loss, if the market does not ultimately reward this type of result to the upside then well we should all pack up and go home So, for today I will remove the stop. Why? Take a look at AAPL (man I should have gone with my instinct to buy the day after earnings release) The stock got hit on the open after earnings then recovered it all back and then some. I don't want that to happen to our POT position. My reasoning for getting into POT was to ride the longer term trend, these earnings 'should' set that trend continuing upwards.

There is an issue regarding strike action by workers at the POT mines, but I am sure neither the unions or POT will allow that to make any significant impact on production. So I am not really counting that in my thought processes.

Trade Plan

HOLD POT. Remove STOP

======================
PotashCorp Surpasses Previous Earnings Record by Over 60 Percent
Thursday July 24, 6:00 am ET


Listed: TSX, NYSE
Symbol: POT

SASKATOON, SK, July 24 /PRNewswire-FirstCall/ - Potash Corporation of Saskatchewan Inc. (PotashCorp) today reported record second-quarter earnings of $2.82 per share(1) ($905.1 million), a 220 percent increase over the $0.88 per share ($285.7 million) earned in last year's second quarter. This represents the highest quarterly earnings in company history - 62 percent above the record $1.74 per share ($566.0 million) set in first-quarter 2008 - and reflects rising global fertilizer demand and the impact of significantly higher prices for potash, nitrogen and phosphate products. Record quarterly gross margin of $1.4 billion was up 187 percent from the $501.4 million generated in the second quarter of 2007, with all three nutrients making record contributions. Earnings for the first six months of 2008 were $4.54 per share ($1.5 billion), more than triple the $1.50 per share ($483.7 million) earned in the first half of last year and higher than the record $3.40 per share ($1.1 billion) earned for the full year 2007. First-half gross margin reached $2.3 billion, compared to $871.1 million in the first six months of 2007, and has already exceeded the record full-year total of $1.9 billion set last year.

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Cash flow from operating activities prior to working capital changes(2) reached $1.1 billion for the quarter and $1.7 billion for the first six months of 2008, compared to $473.7 million for the second quarter of 2007 and $756.7 million for the first half of that year. Earnings before interest, taxes, depreciation and amortization(2) in the quarter grew to $1.4 billion from $496.4 million in last year's second quarter, raising first-half EBITDA to $2.2 billion compared to $877.4 million in the same period of 2007.

This strong performance was enhanced by our offshore investments in Arab Potash Company Ltd. (APC) in Jordan, Sociedad Quimica y Minera de Chile S.A. (SQM) in Chile, Israel Chemical Ltd. (ICL) in Israel and Sinofert Holdings Limited (Sinofert) in China, which added $94.0 million to our before-tax earnings in the quarter. Year to date, these investments have contributed $117.4 million to our other income and the total market value of our investments today is $9.8 billion, roughly equivalent to $30 per PotashCorp share.

"This quarter established a new standard of performance for our company," said PotashCorp President and Chief Executive Officer Bill Doyle. "We are experiencing strong growth in demand and are capturing the value of higher prices in all three nutrients, especially in potash. With farmers around the world striving to maximize yields and placing a priority on fertilization, this quarter provided a glimpse of the future potential of our company."

Market Conditions

Fertilizer demand remained strong, fuelled by the global need to increase food production and by supportive crop commodity prices. Corn prices in the second quarter were up more than 60 percent from the same period last year, while soybean prices were almost double. This is providing farmers with record income and significant motivation to increase acreage planted and yields.

The resulting tight fertilizer supply/demand fundamentals impacted all three nutrients in the quarter, and were clearly evident in higher product prices. First, in potash, inventories were reduced to historically low levels around the world. For example, reported North American producer inventories were 41 percent below the previous five-year average at the end of June, an extremely low level given upcoming summer maintenance shutdowns. Global demand remains unsatisfied, even without considering the protracted contract settlements that left China approximately 3 million tonnes short of previously expected 2008 potash requirements.

Global nitrogen and phosphate supply was impacted in the second quarter by China, the world's largest urea exporter and second-largest phosphate exporter in 2007. China introduced a 35 percent tax on phosphate and nitrogen exports during the first quarter to protect its domestic supply, and then raised it to 135 percent effective from April 20 to September 30, 2008. Phosphate supply tightened further in May when a severe earthquake struck Sichuan Province, which produces 11 percent of China's phosphate rock and a significant amount of related downstream fertilizer, feed and industrial products. In nitrogen, while higher global costs for oil and natural gas supported higher product prices and generally restricted product movement to regions relatively close to the source of production, the Chinese export tax immediately and significantly drove world urea prices higher.

Phosphate producers without an integrated supply of phosphate rock continued to be affected by rising costs for key inputs. The price of rock from Morocco rose to $350-$400 per tonne, compared to $190 in the first quarter of 2008 and $56 in last year's second quarter. Delivered sulfur prices rose to $800 per tonne or higher in China and India, while US molten sulfur prices increased $200 per long ton from the first quarter of 2008.

Potash

Quarterly potash gross margin of $886.4 million was 240 percent higher than the $260.4 million of last year's second quarter and approached 2007's record full-year gross margin, reflecting the benefit of rising prices. For the first six months of 2008, potash generated gross margin of $1.4 billion, more than triple the $434.6 million of the first half of 2007. Gross margin as a percentage of net sales rose to 79 percent compared to 59 percent in the same quarter last year.

As demand continued to exceed available supply in the quarter, PotashCorp and Canpotex, the offshore marketing company for Saskatchewan potash producers, shipped volumes to customers in North America and offshore, respectively, on an allocation basis. The per-tonne North American realized price of $403 was up 122 percent quarter over quarter, as we realized five price increases in that time totaling more than $330 per tonne. This includes the $80-per-short-ton increase established for March-May deliveries while $150-$175 increases announced for June 1 began to be realized. The offshore realized price of $417 was up 192 percent from last year's second quarter as, since that time, Canpotex realized 10 price increases totaling approximately $520 per tonne to Brazil and eight increases totaling $465 per tonne to Southeast Asia. It also began to realize the $355-per-tonne increase built into India's new contract in March, while the $400-per-tonne increase in China's contract signed in April did not appear until late in the quarter because of limited available supply.

Quarterly potash sales volumes of 2.7 million tonnes were the second highest in our history, trailing only last year's second quarter, which we entered with 1.1 million tonnes of inventory and therefore had more product to sell. By quarter-end, our inventories had declined to a record-low 315,000 tonnes, 58 percent below the same time last year and 53 percent below March 31, 2008 levels. North American customers continued to purchase available potash supply despite a weather-delayed spring season, pushing up sales volumes by 3 percent quarter over quarter to 1.1 million tonnes. Offshore volumes for the quarter were 1.6 million tonnes, 7 percent below the same period last year due to lack of available product. Canpotex shipments were down 3 percent quarter over quarter, but up 12 percent year-to-date. Compared to the same period in 2007, second-quarter volumes to Brazil increased by 36 percent to 670,000 tonnes, to Southeast Asia by 49 percent to 825,000 tonnes and to India by 28 percent to 310,000 tonnes. Those countries consumed volumes made available by delays in the negotiation with China, which received only 150,000 tonnes in the quarter (down 82 percent from the second quarter of 2007).

Potash cost of goods sold was almost $21 per tonne higher than in the same quarter last year, largely due to three factors: the translation of Canadian-dollar production costs to a weaker US dollar ($9 per tonne), potash royalties included in the cost of goods sold ($5 per tonne) as a result of higher potash prices, and higher brine inflow costs at New Brunswick ($4 per tonne).

Three-year contracts with unionized employees at each of Cory, Allan and Patience Lake expired on April 30, 2008, and through the course of negotiations, PotashCorp has provided our best and final offer, which we believe is fair, reasonable and responsible. No settlement has yet been reached and, on July 21, 2008, these employees gave their respective bargaining units the authorization to strike. On July 23, each bargaining unit served the company with a strike notice, which enables them to strike at any time following the expiration of 48 hours after the notice was served. In response to the strike notice, PotashCorp served each bargaining unit a lockout notice, which enables us to lock these employees out at any time 48 hours after the notice was served. While we cannot predict the likelihood, form or timing of any work stoppage at these locations, we believe we have appropriate contingency plans in place.

Nitrogen

In a strong pricing environment underpinned by high world energy prices and heavy global agricultural demand, our nitrogen segment generated a record $210.0 million of gross margin in the quarter. This is 46 percent higher than the $144.2 million generated in the same quarter last year, and 13 percent more than the previous record of $185.4 million generated in the first quarter of this year. Year-to-date nitrogen gross margin of $395.4 million is 44 percent ahead of 2007. Our Trinidad operation, which benefits from long-term, lower-cost natural gas contracts, generated $91.8 million in second-quarter gross margin, even with volumes significantly reduced by a major plant outage. This compared to $77.2 million in the same quarter last year. Our US operations, which are geographically insulated from Gulf imports, contributed $106.3 million in gross margin, while hedging gains added $11.9 million.

Realized prices for ammonia increased 70 percent quarter over quarter, while urea prices rose 50 percent from the same quarter last year. The higher prices for other nitrogen fertilizers pushed nitrogen solutions prices up 44 percent compared to the same period of 2007.

Second-quarter ammonia sales volumes fell by 25 percent from 2007, due to reduced product availability resulting from a 53-day shutdown at our Trinidad 04 plant. Urea sales volumes rose 6 percent quarter over quarter, as the negative impact of the delayed 2008 spring season was outweighed by the effect of significantly lower offshore imports that reduced pressure on sales from North American producers. The combination of the late spring and restricted availability of production inputs led to a 31 percent drop in nitrogen solutions volumes.

Driven by significantly higher Tampa ammonia prices to which our Trinidad natural gas cost is indexed, our total average gas cost in the quarter, including hedge, was $7.74 per MMBtu. This was 76 percent higher than in the same quarter of 2007 but 29 percent below the NYMEX average for the second quarter of 2008 of $10.83 per MMBtu.

Phosphate

Substantially higher prices drove second-quarter phosphate gross margin to a record $340.9 million, 252 percent higher than the $96.8 million generated in the same quarter last year. Year-to-date phosphate gross margin of $496.9 million was 209 percent higher than in the first six months of 2007 and has already exceeded the full-year record of $432.8 million set last year. Solid fertilizers generated $191.7 million in the quarter, almost quadruple the $51.4 million of the second quarter of 2007. Liquid fertilizers generated $54.9 million, feed supplements contributed $70.7 million and industrial products added $19.8 million.

Strong global demand and higher input costs contributed to an increase in solid fertilizer realized prices to $961 per tonne in the second quarter, 145 percent above the same quarter last year and 46 percent higher than in the trailing quarter. Liquid fertilizer prices rose 166 percent quarter over quarter, largely the result of a PhosChem contract with India signed at $1,985 per phosphoric acid (P(2)O(5)) tonne for selected second-quarter shipments versus $566 per P(2)O(5) tonne under the previous contract. North American liquid prices did not yet fully reflect the rising value of P(2)O(5), as these sales are primarily contracted on a fertilizer-year basis. Feed prices were up 146 percent quarter over quarter following $250 per-short-ton increases on each of April 1 and May 1. Realized prices for industrial products, which have several contracts with pricing that will not reset until early 2009, rose 71 percent from last year's second quarter.

Strong offshore demand raised solid fertilizer volumes by 6 percent from the second quarter of 2007 and 38 percent from this year's first quarter. This demand was driven by India, which increased its DAP purchases from PhosChem by 225 percent, or almost 500,000 tonnes, from last year's second quarter. Our share of this increase more than offset a 57,000 tonne decline in our North American volumes because of the delayed spring season. Despite weather conditions, liquid fertilizer volumes rose 3 percent from the second quarter of 2007. Feed phosphate sales volumes were down 10 percent quarter over quarter due primarily to current weakness in the US beef, pork and poultry industries, while industrial sales volumes were 11 percent lower after a scheduled plant turnaround and our decision to divert more P(2)O(5) to higher-margin liquid products.

Phosphate cost of sales was negatively impacted by sulfur, which rose 311 percent compared to the same quarter in 2007 and affected all products, while ammonia was up 60 percent quarter over quarter, affecting solid fertilizer costs. Higher prices in all product categories more than offset these rising input costs.

Financial

Provincial mining and other taxes rose by 371 percent from the same quarter last year, and actual provincial mining and other taxes as a percentage of potash segment gross margin rose to 18 percent versus 13 percent in the same quarter in 2007. The significant increase in potash profit per tonne somewhat reduced the impact of the per-tonne deduction benefit for capital spending on potash projects in Saskatchewan. Capital expenditures on property, plant and equipment reached $237.9 million in the quarter, up 87 percent quarter over quarter, with the majority of this related to potash debottlenecking and expansion projects at Lanigan, Patience Lake, Cory, New Brunswick and Rocanville, and loadout expansions at Rocanville and Allan.

As previously disclosed in January 2008, the Board of Directors authorized a share repurchase program that allows PotashCorp to buy back up to 15.8 million shares over the course of one year. Prevailing stock market conditions in the second quarter provided an opportunity to accelerate the buyback. We purchased 7.5 million shares for cancellation in the second quarter, in addition to the 3.4 million shares repurchased in the first quarter. By the end of the second quarter, we had purchased approximately 10.9 million shares under the repurchase program at a cost of approximately $2 billion. We temporarily increased available and outstanding borrowings under our short-term credit facilities to accommodate accelerated buying in the second quarter.

Outlook

We believe the recent attention to issues of food production and food security is a necessary and positive development, as those issues are a long-term reality underpinning growth in the fertilizer industry. Global population continues to rise by an estimated 77 million people per year, with the largest portion of that growth occurring in countries with increasing economic strength such as China and India. Improving diets, specifically adding more protein from animal sources, is a priority in these regions and is putting considerable pressure on global grain supply.

The world's farmers must produce record volumes of grain and oilseeds every year just to meet the growing need for food, animal feed, fiber and fuel. This does not even begin to address the issue of restoring severely depleted global grain inventories, now down to less than two months of supply. That presents farmers with a significant challenge - one that becomes greater as population covers a larger portion of the world's agricultural spaces, leaving less land for food production.

Producing record crops globally year after year is difficult and unpredictable for many reasons, particularly the weather. Due to cool wet weather, more than half of the US corn crop was seeded after May 10th this year -much later than usual - which could reduce crop production. Flooding in the Midwest further impacted production potential and total harvested acreage. The result is higher corn prices, signaling farmers to plant a very large corn crop in 2009. The potential for higher corn plantings has increased competition for acres from other crops, such as soybeans, and has raised futures prices for those crops.

These conditions, in turn, underpin demand for fertilizers, which are essential to maximize the quality and quantity of crop yields. Research has established that without fertilizer, at least 40 percent of the world's annual crop production would be lost. If nutrients in the soil are not replaced following harvest, future production suffers. Thus, the world's ability to produce more grain is tied directly to best farming practices, which include appropriate application of fertilizer, especially in developing regions that continue to under-apply.

The evidence about the financial benefits of proper fertilizer application is powerful. Sensitivity analyses estimate that an average US farmer planting fertilizer-intensive corn - with short ton costs of $1,000 for potash, $1,200 for DAP and $1,000 for urea - and receiving farmgate corn prices of $5.50 per bushel would generate a return of approximately $435 per acre over and above variable costs. This is nearly four times the estimated per-acre returns of US farmers in 2005, the year before crop prices began their strong advance. Of the three nutrients, potash has the smallest per-acre impact on cost, so assuming even higher potash prices in the analysis, the farmer will still generate historically exceptional returns. Although corn futures continue to fluctuate, short-term volatility does not change the long-term equation: proper fertilizer application equals greater return. This holds true for fertilizer investment on other global crops, even at much lower crop prices than are being achieved today. Farmers understand this, which is why higher fertilizer prices have not reduced demand.

Supply and demand will continue to be the drivers of the potash business for the foreseeable future, barring an improbable collapse in crop commodity prices, as an estimated 3-4 million tonnes of annual global potash demand today remains unmet. As a result, delivered offshore spot prices have reached or exceeded $1,000 per tonne. The situation could tighten further, as China's 2008 potash imports are expected to be less than 70 percent of 2007 levels, which should significantly reduce its inventories by the end of the year. While we expect global supply to grow by about 2.5 million tonnes in 2009, with more than half of that coming from our Lanigan and Patience Lake debottlenecks, an increase in demand from China in a short potash market - even a return to its 2007 level of purchases - would leave the world facing even larger potash shortages. None of the buyers in other major potash-consuming markets - including North America, Brazil, India and Southeast Asia - are expected to reduce consumption at a time of tight food supply and high crop prices.

The world's soils will be increasingly deficient in potassium if the unmet demand continues to grow. This will reduce future yield potential, an untenable situation that makes PotashCorp's ongoing capacity expansion program essential to filling the large potash supply/demand gap. On July 17, we announced plans to invest a further $1.6 billion to add a combined 2.7 million tonnes of operational capacity at Allan, Cory and Rocanville. This follows previously completed capacity expansion initiatives at Rocanville (2005), Allan and Esterhazy (2007) and Lanigan (2008), as well as in-progress projects scheduled for completion at Patience Lake (2008), Cory (2010), New Brunswick (2011) and Rocanville (2012). In total, we expect to raise our operational capacity by almost 8 million tonnes between now and the end of 2012. Developing potash capacity is a long-term initiative and requires significant foresight, expertise and understanding of global demand patterns. Just as previous projects announced as long ago as 2003 are today providing increased volumes for our customers and record returns for our company, we anticipate that our projects currently underway will be needed to meet growing global demand. When they come online over the next five years, we expect them to continue generating strong returns for PotashCorp. If demand for any reason is less than expected, we plan to match our production to meet market demand to minimize downside risk, as we have done for the past 21 years.

For the remainder of this year, both PotashCorp and Canpotex are in a sold-out volume position and will continue to ship to North American and offshore customers on an allocation basis. We recently announced a $250-per-short-ton price increase in the North American market effective September 1 through November 30, while Canpotex announced that delivered prices to Brazil and Southeast Asia are now $1,000 per tonne for standard product and $1,025 for granular product. We expect to realize these price increases in the fourth quarter. As a result, we are now forecasting 2008 potash gross margin more than 300 percent higher than that achieved in 2007.

In nitrogen and phosphate, a strong fall season in the US appears likely, driven by the prospect of large 2009 corn plantings and farmers' strong desire to prepare in advance after a difficult wet 2008 spring. High costs for sulfur and phosphate rock are unlikely to abate, and industry consultants expect that contracts for Moroccan rock could reach $450-$500 per tonne in the third quarter. The impact of reduced urea and DAP exports from China is expected to become clearer, with consultants' reports suggesting the 135 percent tax on phosphate exports could be extended through at least the end of 2008. Under these conditions, delivered solid phosphate fertilizer prices to offshore markets could rise in the fourth quarter beyond the current $1,270 per tonne. Urea could be sustained at current high levels for the remainder of 2008 and ammonia is likely to play catch-up and climb substantially in the third quarter. In liquid phosphate, our North American fertilizer-year-based contracts that begin in July will carry realized prices more than 80 percent higher than those achieved in the second quarter, while industrial prices established under longer-term customer contracts will rise slowly through 2008 and should see substantial catch-up in early 2009. As a result, our nitrogen and phosphate gross margins are now forecast to exceed 2007 levels by more than 85 percent and 200 percent, respectively.

Capital expenditures, excluding capitalized interest, are expected to be approximately $1.4 billion for 2008, of which $270 million will relate to sustaining capital. We estimate our consolidated effective income tax rate to be 29 percent in 2008, but it could fall within a range of 28-30 percent, with a current/future split of 90/10. Due to higher potash prices and margins, provincial mining taxes are forecast to be 16.5 percent of total potash gross margin for the year, but could fall within a range of 15-18 percent depending on price realizations, Canadian/US exchange rate and the timing and amount of capital spending on potash projects in Saskatchewan.

With higher expected overall gross margin, which will be partially offset by increased royalties, provincial mining and corporate income taxes, and assuming parity between the Canadian and US dollar, PotashCorp is raising full-year net income guidance from $9.50-$10.50 per share to $12.00-$13.00 per share. We expect third-quarter net income to be in the range of $3.25-$3.75 per share. In the current trading range of the Canadian dollar relative to the US dollar, each one-cent change in the Canadian dollar typically impacts our foreign exchange line by approximately $10.0 million, or $0.02 per share on an after-tax basis, and is primarily a non-cash item.

Conclusion

"The current operating environment provides an opportunity to deliver record results, but more importantly gives us the ability to reinvest our strong cash flow for sustainable growth in the future," said Doyle. "Food production and fertilizer demand are not quarter-to-quarter issues. They are long-term necessities tied to human development which are likely to intensify over time. As we have in the past, we will keep our focus on the future and execute strategies designed to generate the greatest long-term value and opportunity for all our stakeholders, including our customers, investors and employees."

[berloga]

POT sure looks scary by performing this Olympic style exponential run up in the past couple of years! But, what matters is the World economy change. Food becomes more expensive as peoples' appetite grows due to improved standard of living. 2.5bln east Indians and the China-men need lots of food. Thus, in my opinion, albeit looking scary, POT can turn out to be a sound investment. Their CEO said before, that POT enjoys fat profit margins due to its dominance at the market. POT dictates the sale price and the customers have no choice but to pay. Envious type of business!

[la-onda]

Potash results boost Israel Chemicals: Potash Corp's profit for the second quarter more than tripled to $905.1 million.
Thursday , July 24, 2008 17:11ET

Jul 24, 2008 (Globes - McClatchy-Tribune Information Services via COMTEX) -- Potash Corp. of Saskatchewan (NYSE; TSX: POT), which holds 10 percent of Israel Chemicals Ltd. (TASE: ICL) broke its own record today when it published its second quarter financial report today, giving it a boost in the process. Israel Chemicals fell by 4.4 percent in morning trading on the back of the declines in fertilizer stocks on Wall Street yesterday, but later rallied following the publication of Potash Corp's results and is currently down 0.4 percent.

Potash Corp. posted a profit of $905.1 million, a 220 percent jump over the corresponding quarter in 2007, and 62 percent more than in the preceding quarter. Earnings per share totaled $2.82, and gross profit soared 187 percent to $1.4 billion.

Potash Corp. raised its full-year earnings guidance by 25 percent to $12-13 per share from $9.50-10.50, with earnings for the third quarter expected to come in at $3.25-3.75 per share. Earnings per share for the first half of the year more than tripled to $4.54 per share. "This quarter established a new standard of performance for our company," said Potash Corp. president and CEO Bill Doyle.

Bank Hapoalim analyst Gilad Sarig told "Globes", "What we have seen today confirms what we thought would happen in this sector. A 75 percent gross profit on potash leaves no room for doubt. There have also been strong gains in phosphates. An operating profit of 45 percent at a time like this is extremely rare.

"Potash Corp's guidance reiterates what we have been saying. The slight fall in commodity prices will not affect margins," added Sarig.

&

POT: Short Interest UP 11.8% to 4.2M in Mid Jul 2008
Thursday , July 24, 2008 16:52ET
According to new short interest data from NYSE, short interest for Potash Corporation of Saskatchewan, Inc. (NYSE: POT) INCREASED 11.8% to 4,165,638 shares as reported in mid-July, 2008. Based on POT's 20-day average daily share volume of 9,996,180, it would require approximately 1 day(s) of buying to cover this short interest.

&

POT: Q2 EPS $2.82 vs 88c Beats $2.61 Est; Guidance Varies from Consensus
Thursday , July 24, 2008 11:47ET

QUARTER RESULTS
Potash Corporation of Saskatchewan, Inc. (POT) reported Q2 results ended June 2008. Q2 Revenues were $2,621.00M; +93.70% vs yr-ago; BEATING revenue consensus by +2.72%. Q2 EPS was $2.82; +220.45% vs yr-ago; BEATING earnings consensus by +8.05%.

GUIDANCE

Q3-08 Earnings Outlook [$3.25 - $3.75]: The Company expects third-quarter net income to be in the range of $3.25-$3.75 per share. The Q3-08 earnings forecast is in-line with current consensus estimates.
FY-08 Earnings Outlook [$12.00 - $13.00]: PotashCorp is raising full-year net income guidance from $9.50-$10.50 per share to $12.00-$13.00 per share. The FY-08 earnings forecast is above current consensus estimates.

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POT: Scotia Cap Cuts to Sector Perform from Sector Outperform
Thursday , July 24, 2008 08:03ET
Issuer: Potash Corporation of Saskatchewan, Inc. (NYSE: POT)
Analyst Firm:  Scotia Capital
Ratings Action: DOWNGRADE
Current Rating: Sector Perform (from Sector Outperform)

[AussieTrader]

Update:


Indeed we had a very volatile days trading with a $25 range seen (low to high) and huge volume. If we had kept our stop we would be out, so thus far I am comfortable with that decision. Look at the attached chart, when POT released their Q1 results a similar pullback and trend resumption occurred then. It is a very  strange marketplace when a company with the profit and growth delivery such as POT go backwards not forwards.

Yesterday we had an analyst (Scotia) downgrade from outperform to perform!! Nope I don't understand that one. Today we have TD upgrading their price target to $350.00. Most analysts covering now have targets of $300 and above.

I think POT and other agriculture stocks are seeing profit taking / rotation due to weakness in commodities, oil, metals into financials (short term). I see that as churning and not a long term sentiment.

There is no point analysing the report any further it is as good as it can get. The conf call was very positive and the management very focussed and on top of what they need to be.

I will keep our position in POT without the stop again today. I think if we can get through this  period we will see POT resuming an up-trend in line with the results and guidance it has given.

Trade Plan:

HOLD POT

[AussieTrader]

I will keep our position in POT without the stop again today. I think if we can get through this  period we will see POT resuming an up-trend in line with the results and guidance it has given.

Update

This is a tough period for holding stocks (long). Even those which have fantastic fundamentals, growth, forecasts etc. In bear markets even the very best stocks can go downwards.

The steelworkers strike has started, but the 2 parties are talking. Resolution will at least remove 1 hurdle which may be a drag on the stock price.

Now, I will not hold onto POT blindly 'hoping' for it to move upwards. We will watch it closely and exit for capital protection if it is required. Again I will not have a hard stop in place today.

Trading Plan:
HOLD POT

[AussieTrader]

Update:

POT and commodities in general took a hammering yesterday, whether I think it is an over reaction or not doesn't really matter. What really matters is what the effect is on the stock price and the shape of the chart. The excellant fundamentals, guidance and growth still remain, however the market doesn't seem to care too much for that.

I have a long term weekly chart below, with just one indicator on it being a 30 week moving average. This week POT is trading below that benchmark in the same manner as was seen in the Feb 2008 correction. If it doesn't recover that area, then we could be looking a a definitive direction change.

Again I will not put a hard stop in place, we are too close to a pivot low set-up possibly occuring and I am looking for a reactive bounce from commodities, so for today I will keep the trade plan as it has been these past days. We will re-asses this judgement tomorrow.

Trade Plan:
HOLD POT

[AussieTrader]

Update:

When the broad market rallies hard and one of the stocks you hold doesn't you must question and investigate continually. Ag stocks have been taking some big hits as we have seen. POT is right in the long term support zone, so reactively selling now would be a mistake, I must allow this sector and POT to find support and react from it. The fundamentals as we all know are fantastic, that is why I will continue to hold with confidence at this level (for now).

Options trading can show some significant insight into future market sentiment. POT has had huge PUT positions traded in the past few sessions many of which are now heavily in the money. Options trading this week has swung more to CALL purchasing which gives support to my own current sentiment.

So we shall watch very closely, the 200SMA and long term ascending support is very close by on the daily chart, yesterdays candle is an indecisive Doji, again signalling a possible pivot point.

Trade Plan:

HOLD POT

[AussieTrader]

Update:

In Stan Weinsteins book 'How to profit in bull and bear markets' he analyzes charts in stages. Stage 1 base - Stage 2 Bull run - Stage 3 Top - Stage 4 Downturn. He also comments which comes to mind here that sometimes a stock can have the most glowing of fundamentals, huge growth prospects, very positive institutional sentiment and price targets, and still the stock can just keep going down (in Stage 4 downturn action).

Sadly that is how I now see POT. It has technically broken my key long term support areas on all chart timeframes. So I have to take action. We will put a stop in place for POT at $155.50, just below yesterdays low.

Trade Plan:

HOLD POT with Stop at $155.50

[AussieTrader]

Update:

POT reacted at last in an attempt to stem the downwards momentum, volume was good and price closed just shy of the high and just re-claimed the ground above the 200sma.

We have our trend change stop in place and it will remain the same for today. I am expecting POT to consolidate this reaction and begin to move upwards again.

Trade Plan:

HOLD POT with Stop at $155.50

[la-onda]

Potash (POT) NewsBite - Upgrade Boosts POT
Monday , August 18, 2008 11:20ET

Aug 18, 2008 (Fresh Brewed Media via COMTEX) -- Potash (NYSE: POT) opened at $173.42. So far today, the stock has hit a low of $171.83 and a high of $178.29. POT is now trading at $174.04, up $4.23 (2.49%). Over the last 52 weeks the stock has ranged from a low of $74.15 to a high of $241.62. POT shares are rising this morning after an analyst at Citi Investment Research added the stock to his "Top Picks Live" list. The analyst maintains a Buy Rating on the stock with a $264 price target. Technical indicators for the stock are bullish and S&P gives POT a positive 5 STARS (out of 5) strong buy ranking. If you are looking for a hedged play on POT the stock seems like it could be a candidate for a September out-of-the-money bull-put credit spread below the 145 range.

[AussieTrader]

Update:

Commodities are back in fashion, last week we saw some significant price rises in many products such as nickel, wheat, corn and crude oil. Many stocks in these sectors (especially those with superior fundamentals and growth prospects) also participated in the strong action. This article summaries the situation nicely http://www.bloomberg.com/apps/news?pid=20670001&refer=home&sid=aS5cpxZqCfFA

POT has been in the thick of the action, reacting nicely after piercing the 200sma and surging upwards and stopping (now consolidating at the long term ascending support (now resistance line which goes back 2 years). There is still the unresolved issue of the steel workers strike, but worldwide demand for the product will offset any impact the strike may have.

POT has great fundamentally driven growth still in the tank, if we get a return of any bullish market action developing the stock will respond positively and over time break to new highs again.

Trade Plan:

HOLD POT with a Stop at $155.50