Intrepid Potash (IPI) has a volatile history. The stock closed at $1.65 on March 23, 2017, a 20.7% fall YTD (year-to-date).
Investors’ returns have taken a hit and so has the confidence in the uptick of the fertilizer industry. Let’s discuss these returns in more detail.
Due to falling industry fundamentals, Intrepid Potash’s ability to generate enough cash flow has affected its ability to service its debts.
In 2016, Intrepid Potash’s gross margin per metric ton for its potash products was -$74 (or $81 per short ton), resulting in a gross margin rate of -42%.
In this article, we’ll compare the company’s potash cost of goods per ton to its average selling price per ton and those of other players in the market.
Companies invest in expansion projects during profitable years, but those facilities have longer lead times. When the supply side outweighs the demand side, prices take a hit.
Potash and Trio’s margins being below zero for a sustained period may prove dangerous for Intrepid Potash. The company’s having higher costs than its selling prices is simply not sustainable.
Potash’s market (SOIL) includes big fish such as PotashCorp (POT), The Mosaic Company (MOS), and Agrium (AGU), along with international players.
Sales for commodity companies such as Intrepid Potash, PotashCorp (POT), Agrium (AGU), and CF Industries (CF) are a function of shipments and realized prices.
In recent quarters, Intrepid Potash’s sales have suffered significantly. The company’s sales come from two products: potash and langbeinite, also known as Trio.
Intrepid Potash (IPI) stock has remained weak in terms of performance so far this year. On March 22, 2017, Intrepid Potash was trading at a fall of 22% year-to-date.
On March 21, 2017, Sprint was trading 3.5% above its 100-day moving average. Verizon (VZ) was trading 0.30% above its 100-day moving average.
As of March 21, 2017, Sprint’s (S) forward EV-to-EBITDA metric was ~5.8x, which was lower than T-Mobile’s (TMUS) at ~6.6x.
Sprint reported much improved total general purpose liquidity of $9.1 billion at the end of fiscal 3Q16.
In fiscal 3Q16, Sprint spent more than $1.2 billion on cash capex. That compares to $0.80 billion in fiscal 2Q16 and $1.6 billion in fiscal 3Q15.
The take rate of Sprint’s (S) leasing plans continued to surpass its installment plans in fiscal 3Q16. Its take rate of leasing plans reached ~43.0% that quarter.
Tarek Robbiati, Sprint’s chief financial officer, said Sprint is well positioned for unlimited data, given its deep spectrum position.
As of March 21, 2017, 57.1% of the 28 analysts covering Sprint (S) stock have recommended a “hold.”
As of March 21, 2017, Sprint’s forward EV-to-EBITDA metric was ~5.8x, which was lower than T-Mobile’s at ~6.6x.
A potential hiccup Sprint could face if it tries to merge with T-Mobile is that it could end up in a bidding war with a giant media company.