Great Call on Potash Corp! What's Next?

Potash is a great source of potassium, an essential ingredient for fertilizers -- and apparently more exciting than Hannah Montana concert tickets.

Potash Corp of Saskatchewan (NYSE: POT  ) has been one of the main beneficiaries of the recent spike in demand for potash, and investors have reaped a windfall. Potash Corp's shares have more than tripled over the past year. On CAPS, more than 3,000 investors currently weigh in on this smoking-hot stock, with nearly 95% of them bullish. 

But so far, none of these investors has had Potash Corp's number like CAPS All-Star jocdocps. She put her thumb up on Potash Corp way back in October 2006, and she's held on since then, scoring a whopping 570 points on that one call.

jocdocps is one of CAPS' All-Stars -- players with a rating of 80 or greater -- and she's managed a stock-picking accuracy of 53% on her calls, while racking up an impressive 3,159 points. Potash Corp hasn't been her only great call. Here's a look at a few of her other prescient picks:

Company

Date Picked

Call

Points

CAPS Rating

Mosaic (NYSE: MOS  )

4/23/07

Outperform

412

****

Petrohawk Energy (NYSE: HK  )

9/28/06

Outperform

304

*****

CF Industries

4/23/07

Outperform

284

****

Data from CAPS.

So what is this investor looking at these days? Here are a few of her most recent calls on CAPS:

Company

Date Picked

Call

CAPS Rating

Yingli Green Energy (NYSE: YGE  )

5/20/08

Outperform

****

Valero Energy (NYSE: VLO  )

5/20/08

Outperform

****

China Sunergy (Nasdaq: CSUN  )

5/20/08

Outperform

**

Data from CAPS.

While not all of these picks may pan out, they could be a good place to start some further research. I decided to take a closer look at Yingli Green Energy.

What's so great about Yingli?
Last week, we got a reminder that the pure-play manufacturers aren't the only ones vying for a piece of the solar-power pie. Intel announced the spinoff of its solar subsidiary, SpectraWatt, while IBM announced that it will work on thin-film solar cells with a Japanese partner.

In the world of photovoltaics, other major players include BP (NYSE: BP  ) , Sanyo, Sharp, and Kyocera. And let's not forget that SunPower was spun out from semiconductor maker Cypress Semiconductor. So with all that clout chasing solar dollars, why are investors so positive about upstarts like Yingli?

Reading through the comments on CAPS, it's apparent that most investors aren't really thinking about the positioning of the specific companies, nor whether those businesses are working to gain any competitive advantages. The financial results of the solar companies, and solar's resulting status as one of the market's best-performing sectors, seems to be enough for now. CAPS All-Star TheHarm is one top investor who thinks Fools need look no further than recent financial performance:

Just look at the revenue growth and you don't even need to look further. I'm not even going to explain the rest. If you don't know why this stock is a good pick you shouldn't even be trading. This stock is going to see massive gains throughout 2008/2009.

Let's not ignore the risk of this carriage turning back into a pumpkin, though. After all, there is a lot of new solar capacity coming into the market, and the demand for solar cells remains highly dependent on government subsidies. It's also notable that Yingli doesn't have any particular special sauce when it comes to its technology. It could be hurt if competitors make significant technological progress, or if new entrants continue to flood the market.

Of course, the best certainly could still be ahead for Yingli. If the company ends up earning anywhere near the $6.83 per share that analysts are currently projecting for 2008, investors will likely be handsomely rewarded. But the uncertainties facing solar players like Yingli also provide a great reminder why Warren Buffett avoids investing in technology companies.

So what's your take on Yingli? Get in the action by clicking over to CAPS. CAPS is absolutely free, and it already has more than 110,000 stock pickers chipping in to find the best stocks out there.

More CAPS Foolishness:

Intel is a Motley Fool Inside Value recommendation. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Matt Koppenheffer does not own shares of any of the companies mentioned. The Fool’s disclosure policy made its own great call by recently switching to a cheaper DVD-rental-by-mail service.


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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On June 27, 2008, at 4:33 PM, motleyjerry wrote:

    It appears to me that you may have stated the estimated 2008 earnings in Chinese Yuan. In that case the earnings for 2008 would be closer to $1.00. Makes for a far poorer investment than you indicate.

  • Report this Comment On June 27, 2008, at 4:33 PM, motleyjerry wrote:

    In my post I was referencing YGE.

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