MOS

Monsanto Reports Fourth Quarter Results and Moves into Data

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Agricultural biotechnology giant Monsanto (click ticker for report: ) posted slightly disappointing fourth quarter results Wednesday morning. For the full year, revenue increased 8.7% year-over-year to $14.8 billion, while quarterly revenue rose 4.9% year-over-year to $2.2 billion–a touch short of consensus estimates. Earnings per share for the full year advanced 21% year-over-year to $4.60, with the firm’s quarterly loss increasing by five cents to $0.47 per share–worse than consensus expectations. Free cash flow during fiscal year 2013 was $2 billion, equal to 13.2% of total revenue. The fourth quarter isn’t much of a revenue driver or profit driver for Monsanto, so we find it more prudent to take a closer look at full-year results. Image Source: Monsanto The firm’s ‘Corn … Read more

The Potash Situation Gets More Interesting

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Late last month, Russian producer Uralkali backed out of a highly profitable and rational potash cartel arrangement, creating a free-for-all in the global potash market. As a result, shares of North American potash producers such as Potash (click ticker for report: ), Mosaic (click ticker for report: ), Agrium (click ticker for report: ), and Intrepid Potash (click ticker for report: ) have come under significant pressure as a result of the prospects for significant lower economic returns. Then mining giant BHP (click ticker for report: ) confirmed it will invest in its Jansen potash project, which will add even more potash supply to the market. A look at industry bellwether Potash’s shares below reveals the recent difficult performance experienced by the … Read more

Uralkali Backs Out of Belarusian Potash Company; Industry to Change

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Early this morning, Russian fertilizer Uralkali announced it will leave the Belarusian Potash Company in order to grab market share. CEO Vladislav Baumgertner asserted that BPC partner Belaruskali had been making potash exports outside of the pre-arranged agreement, rendering the BPC useless. Until now, the potash industry had been a relatively stable cartel allowing industry participants to generate robust amounts of free cash flow as spot prices rested well above the cost of production. On a conference call following the announcement, Baumgertner mentioned that the price of potash could fall by over $100/tonne as Uralkali will boost production nearly 25% and look to steal market share. Uralkali is the largest single potash producer in the world and likely has the … Read more

Potash Corp Struggles with Weak Nutrient Prices

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Nutrient fertilizer producer Potash Corp (click ticker for report: ) posted weak second quarter results Thursday morning. Revenue declined 11% year-over-year to $2.1 billion, worse than consensus estimates had anticipated. Earnings per share, adjusted for one-time items, declined 26% year-over-year to $0.73 per share, which was also worse than consensus expectations. Free cash flow remained terrific at $848 million, equal to 40% of revenue. Image Source: POT 2Q 2013 Investor Slides Potash’s issue during the second quarter was the material decline in potash (the mineral) gross margins. Prices declined significantly, falling 18% year-over-year to $356 per tonne as robust North American farmer demand (up 28% year-over-year) was more than offset by lower realized prices shipped via Canpotex. Price is paramount … Read more

Is BHP Jumping Into the Potash Market?

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Earlier this week, rumors intensified regarding mining giant BHP (click ticker for report: BHP) and the firm’s prospective entry into the potash market. Because demand for potash (see image below) tends to be a bit more stable than the company’s other resources (namely iron ore), we can see why BHP would be interested in entering the market. Image Source: Potash As it is currently structured, the potash market is dominated by a few large players, namely Canpotex and Belarus Potash Company. Canpotex is comprised of Potash Corporation (click ticker for report: ), Mosaic (click ticker for report: ), and Agrium (click ticker for report: ), while the Belarus Potash Company (BPC) represents the Russian equivalents. These two producers form a … Read more

ICYMI — Video: Will Hasty Policy Facilitate the Next Leg Down, or Do We Have It Coming Anyway?

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President of Investment Research and award-winning author of Value Trap: Theory of Universal Valuation Brian Nelson explains how US policymakers are stuck between a rock and a hard place, and how the market may be factoring in too high of a probability of a return to normalcy before 2021. This and more in the latest video report. Summary Make sure you review Value Trap on Amazon. Do so here. We think those that bought equities near the bottom of this swoon may be looking to take profits at present levels. The market is currently reflecting an 80%-85% probability of a return to normalcy before 2021, which we believe is too high at this time. Our main concern is that government … Read more