Potash Wins this Week (POT, MOS, IPI)

This week the bet to place was on the Potash Stocks including Intrepid Potash, Inc. (NYSE:IPI), Potash Corp./Saskatchewan (NYSE:POT), and the Mosaic Company(NYSE:MOS) to name the big dogs and big winners.  Investors are falling back in love with AG stocks (for the moment) and potash is where its at, but will the trend continue?

Potash Corp and Intrepid both ralled 10% since Monday, and Mosaic is up 11%.  To add another name to the mix -- Agrium (NYSE:AGU) up 5.6% since Monday.  Remember we talked up -- Jeff Macke Buys Agrium: Could this be the Bottom for AGU? back on May 6th, again, timing is everything is this market.

On Tuesday (5/12) the World Agriculture Supply and Demand Estimates report set the stage for the Potash rally. The report said U.S. commodities production will drop slightly while consumption will increase in May compared with last month. This drop in production will result in a reduction in world stocks.

Another positive report for the AG sector came out on Wednesday from the USDA. The report said for 2009 and 2010 the USDA expects the second-highest corn yields in history and extremely low stocks-to-use ratios. One more bullish data point for the ag sector was the China trade report that showed a 55% increase in soybean imports since last year.

Name	Symbol	Last price	Mkt cap	Avg vol	52wk high	52wk low	EPS	P/E	Beta
Agrium Inc. (USA)	AGU	$47.77	7.52B	3.22M	113.88	22.08	6.71	7.14	1.37
Intrepid Potash, Inc.	IPI	$28.34	2.14B	1.59M	76.24	13.8	1.79	15.93
Potash Corp./Saskatchewan (USA)	POT	$105.80	31.27B	7.55M	241.62	47.54	9.96	10.63	1.27
The Mosaic Company	MOS	$50.49	22.44B	7.18M	163.25	21.94	6.87	7.35	1.10

So back to Potash Corp (NYSE:POT) -- Sam Kanes has a “sector outperform” recommendation on the stock, up from an earlier “sector perform” recommendation. Much of the switch is due to the fact that Potash Corp.'s share price has risen just 10% since Mr. Kanes said he preferred Methanex Corp. over Potash Corp., in mid-February. Since then, Methanex has surged 74%.

“We have decided to reverse our preference back to POT over MX due mainly to relative price performance prospects, but also better-than-expected corn and soybean prices on lower-than-expected Argentina and Brazil harvests,” he said in a note.

However, he revised his 12-month price target on Potash Corp. shares to $150 from $155, due to the effects of the higher Canadian dollar. Other analysts have moved in the other direction with their target prices. Merrill Lynch boosted its target to $120 (U.S.) from $90 (the shares trade in New York as well as Toronto). And Morgan Stanley raised its target to $120 from $100.

Potash stocks are on fire, there's been some big money moving in, and the trend may continue for a few more days but be sure to take your profits in this wonderful market. 

Happy Friday and Happy Safe Investing.