Last time around, we looked at the big picture driving the demand for PotashCorp's
How about this fun farming fact? Indian imports of urea have risen more than 30-fold since 2003. Urea is one of the products falling under Potash's nitrogen products segment, and it's a combination of ammonia and carbon dioxide. Ammonia, in turn, is synthesized from natural gas, so Potash has a strong incentive to secure low-cost natural gas production. It's found such a supply in Trinidad and Tobago, a country where folks like Petro-Canada
Potash (the mineral), which is experiencing strong demand as well, is mined directly out of the earth. Most of Potash's potash hails from Saskatchewan, a region perhaps better known for Cameco's
Add in the lucrative phosphate segment, and you have a company growing revenue by nearly 40% for the year. Profits fared significantly better, thanks to operating leverage. Potash is also very confident about 2008, forecasting per-share earnings growth in the neighborhood of 100%.
Now, the reason that investing in global megatrends can be so rewarding is that they tend to persist much longer than a normal business cycle. A couple more years like this one, and the valuation of Potash and competitors Mosaic
The Global Gains team constantly scours the world for companies benefiting from megatrends, agriculture companies included. You can check out all their current stock recommendations by taking a free 30-day trial.