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Intrepid Potash Is Gaining Momentum in 2017

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Intrepid Potash rose

As of the week ending August 4, 2017, Intrepid Potash (IPI) stock rose 26% through the week and settled at $3.83 per share. The gain in Intrepid Potash stock was primarily boosted by its earnings announcement on August 2, 2017.

YTD performance

In the above chart, you can see that Intrepid Potash outperformed the benchmark indexes with a YTD (year-to-date) return of ~61%. The VanEck Vectors Agribusiness ETF (MOO) has returned ~11.9% YTD, while the S&P 500 Index (SPY) has returned ~10.8% during the same period.

Investors’ optimism towards Intrepid Potash stock appears to be coming from better-than-expected 2Q17 results along with a positive outlook for potash fertilizer. During 2Q17, the company reported EPS (earnings per share) of -$0.03, which was better than analysts’ consensus range of -$0.07–$0.05 surveyed by Reuters.

These negative earnings show that the company is still facing headwinds. However, the fertilizer environment appears to be limping back to normal.

Other producers’ performance

Other companies that produce potash fertilizers haven’t had such a favorable run this year. For example, PotashCorp (POT), which is the largest potash fertilizer producer, has returned losses of 2.1% YTD. Agrium (AGU) has returned losses of 5.4% YTD, while Mosaic (MOS) has experienced one of its worst years—it has delivered losses of 25% YTD.

Series overview

In this series, we’ll discuss Intrepid Potash’s earnings in more detail and look at management’s outlook as we step into the remaining half of the year and 2018. Since the potash fertilizer industry is facing cyclical issues, we’ll also look for clues on how the industry is expected to turn around in the coming quarters.

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