With 2012 just beginning, now's a smart time to gauge how the stocks you're interested in are likely to do this year and beyond. By knowing what stock analysts and fellow investors expect from a stock, you'll be smarter about whether you should keep buy it for your portfolio -- or sell it if you already own it.
Today, let's take a look at Terra Nitrogen
Forecasts on Terra Nitrogen
|Expected 2012 Change in Wheat Prices, Based on Futures||14%|
|Expected 2012 Change in Corn Prices||(8%)|
|Expected 2012 Change in Soybean Prices||1%|
|CAPS Rating for Terra Nitrogen (out of 5)||*****|
Sources: Chicago Board of Trade, Motley Fool CAPS.
Will Terra Nitrogen keep growing in 2012?
The big queston for Terra Nitrogen going forward is what will happen with crop prices. When farmers have money to spend, they tend to use it to enhance crop yields by buying fertilizer. That boosts demand and helps Terra Nitrogen and its peers raise the prices they charge for their products, but there's a delicate balance that can cause problems if crop prices reverse course.
At least for now, the bullish case seems to be intact. Terra's majority owner, CF Industries
In the longer run, though, high levels of corn planting could depress prices. Futures markets already have expected corn prices for early 2013 well below their current levels. And although Fool analyst Neha Chamaria believes that fear of falling corn prices is unjustified, a change in long-term trends could hurt Terra Nitrogen in the long run.
Still, with the inherently lower cost structure of nitrogen-based fertilizers over the mined potash and phosphates that PotashCorp
Even though agriculture is a promising place to invest in 2012, we think we've found an even better idea. Check out The Motley Fool's latest special report to discover our top stock pick for 2012. It's free, but it won't be available for long, so get your copy now.
Add Terra Nitrogen to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.
Fool contributor Dan Caplinger doesn't own shares of the companies mentioned. The Motley Fool owns shares of CF Industries. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool has a disclosure policy.