4-Star Stocks Poised to Pop: PotashCorp

Based on the aggregated intelligence of 120,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, fertilizer giant PotashCorp (NYSE: POT  ) has earned a respected four-star ranking. While five-star stocks have been the best performers, our data has shown that four-star stocks still outshine the market by a significant margin and shouldn't be taken lightly; conversely, low-rated stocks have woefully lagged the market average.

With that in mind, let's take a closer look at PotashCorp's business, and see what CAPS investors are saying about the stock right now.

PotashCorp facts

Headquarters

Saskatoon, Canada (1953)

Market Cap

$23.97 billion

Industry

Agricultural chemicals

TTM Revenue

$8.50 billion

Management

CEO William Doyle

CFO Wayne Brownlee

Return on Capital (average last three years)

20%

Competitors

Mosaic (NYSE: MOS  ) ,

Agrium (NYSE: AGU  )

CAPS members bullish on POT also bullish on:

Freeport-McMoRan Copper & Gold (NYSE: FCX  ) ,

Transocean (NYSE: RIG  )

CAPS members bearish on POT also bearish on:

Monsanto (NYSE: MON  ) ,

First Solar (Nasdaq: FSLR  )

Sources: Capital IQ (a division of Standard & Poor's), and Motley Fool CAPS. TTM = trailing 12 months.

Over on CAPS, 380 of the 438 All-Star members who have rated PotashCorp -- or 87% -- believe the stock will outperform the S&P 500. These bulls include sandvig and rbgibbons, both of whom are ranked in the top 1% of our community.

Three weeks ago, sandvig had this to say of the stock:

We do seem to have a dependence on food. That is not likely to change anytime soon. Fertilizer will play an important role in responding to this need. [PotashCorp] is in the enviable position of having a big moat. They control about 1/4 of the world's potash supply.

In a pitch last week, rbgibbons shares that bullishness:

Grain inventories at low levels. Prices are low, but should correct eventually. New Potash mines take a long time to come online, so supply growth is limited, while demand should be high. The combination gives the company pricing power that should make today's prices seem stupidly cheap.

What do you think about PotashCorp, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. CAPS is 100% free, so simply click here to get started.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Fool's disclosure policy always gets a perfect score.


Read/Post Comments (1) | Recommend This Article (11)

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  • Report this Comment On October 30, 2008, at 5:24 PM, EPS100Momentum wrote:

    I was bullish on the fertilizer - agriculture stocks the last time they ran up and they are basically the sole reason I climbed to 5000 points on caps. But when it turned to the downside it was violent. I actually dropped to negative points before bouncing back to green points. Hopefully all the violent selling was completely overdone and has left us with a second chance at an opportunity that only comes a few times in a lifetime. Which is to buy stocks you know for sure can repeat what they did in the past because nothing that drove these stocks in the past has changed. People still need to eat and the growing worldwide population did not stop growing because we went into a recession.

    All five stocks below have forward pe's below 5 , can you imagine getting a growth stock with a forward PE of 5 during a bull market? Thats why I love Bear markets its full of opportunities:

    POT, CF, AGU, MOS, CNH

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