POT: Citigroup adds Potash to their Top Picks Live list: - sell-off overdone - Reit Buy and $264 tgt.
Friday data from the TFI showed that North American potash producer inventories fell by 10% MoM in July to ~1.0 mln tonnes (35% below the 5-year average).
POT shares have suffered along with the rest of the materials/energy sector as global growth concerns mount. However, the market has failed to recognize that demand for grains rarely cycle (supply cycles though) and has shown little historical correlation with economic activity.
Bottom Line – Citi believes the sell-off is overdone and at 7x core ’09 earnings, POT is discounting a far worse earnings scenario than fundamentals indicate.
Notablecalls (as disted on NCN): I think POT will get a boost on this call. One to watch today.
Friday data from the TFI showed that North American potash producer inventories fell by 10% MoM in July to ~1.0 mln tonnes (35% below the 5-year average).
POT shares have suffered along with the rest of the materials/energy sector as global growth concerns mount. However, the market has failed to recognize that demand for grains rarely cycle (supply cycles though) and has shown little historical correlation with economic activity.
Bottom Line – Citi believes the sell-off is overdone and at 7x core ’09 earnings, POT is discounting a far worse earnings scenario than fundamentals indicate.
Notablecalls (as disted on NCN): I think POT will get a boost on this call. One to watch today.
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