Mosaic Co (MOS), Intrepid Potash, Inc. (IPI), Potash Corp./Saskatchewan (USA) (POT): Why Is Koch Industries Bullish on Fertilizer Stocks?

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However, from what it looks like, analysts have written-off potash producers too fast. For the last quarter of 2014, Mosaic Co (NYSE:MOS) reported outstanding financial results with earnings per share of $0.97, versus $0.30 a year ago. Moreover, the company’s revenue went up to $2.4 billion, from $2.2 billion. For the full 2014, Mosaic Co (NYSE:MOS) posted net income of $2.68 per share, versus $2.49 per share in the previous year. Potash Corp./Saskatchewan (USA) (NYSE:POT) posted EPS of $0.49 for the fourth quarter, versus $0.26 a year ago and net income of $1.82 per share for the full 2014, below from $2.04 in the previous year. Intrepid Potash, Inc. (NYSE:IPI) has not yet reported its full-year results, but for the first nine months of last year it reported a 39% annual increase in sales volume.

Therefore, strong results will probably create an incentive for investors to buy fertilizer stocks. So far, as at the end of December, Jean-Marie Eveillard‘s First Eagle Investment Management disclosed ownership of 2.81 million shares of Mosaic Co (NYSE:MOS) and 21.34 million shares of Potash Corp./Saskatchewan (USA) (NYSE:POT). The investor has cut its stake in Mosaic Co by some 755,000 shares and inched up its position in Potash Corp by 42,500 shares during the fourth quarter. On the other hand, Ken Griffin‘s Citadel Advisors, which at the end of September held shares of all three companies, in its latest 13F disclosed closing all three positions.

Overall, potash producers seem to be growing in the next couple of years due to sustainable levels of consumption in emerging markets and an increasing growth in the agriculture production segment. Moreover, since natural gas serves as one of the key materials for the production of fertilizers, a lower price level will also help fertilizer producers to increase their profits.

Disclosure: none

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