More From Xun Yao Chen
Darden analysis: Assessing the success of a Darden brand spinoff
Darden Restaurants Inc. (DRI) has jumped since the Wall Street Journal mentioned that Barington Capital Group took a 2.8% stake, calling on Darden to split in two.
Why more Europeans could be eating at McDonalds and Yum!
Employment could be turning around The below chart shows employment growth for countries in Europe. The Eurozone, which only includes countries using the euro (so, excluding the United Kingdom and Russia), has been experiencing a declining growth rate over the past two years. While the overall growth was in positive territory from mid-2010 to mid-2011, […]
Why India’s potash price discount won’t affect share prices
The significance of potash price Wholesale potash price is one of two factors (the other being sales volume) that influence potash producers’ revenues. When prices rise, so does revenue, which will translate to higher profitability (margins), earnings, and share prices. However, when prices fall, they will have a negative impact on fundamentals and share prices. […]
Why current secondhand oil tanker values suggest a mixed outlook
While the VLCC data is positive, the picture for the crude tanker business remains mixed. This could portray a short-to-medium-term negative outlook.
Was Uralkali’s new business strategy really Canpotex’s fault?
Uralkali’s latest move might be considered a punishment. But also note that outside forces can create a more competitive environment.
Why a pullback in orders is normal in a dry bulk shipping upcycle
On November 1, ship orders for all key dry bulk vessel classes fell. Ship orders reflect managers’ expectations of future supply and demand differences.
Why is the end use of potash internationally diversified?
As crops widely trade in the international market, they often converge with each other if transportation costs aren’t so high.
Syria strike would raise gas prices and reduce restaurants’ sales
Why higher gasoline prices can reduce people’s leftover spending at restaurants, which will negatively affect restaurant sales.
Darden analysis: Why lower average checks are outperforming
Adding a little bit of spice to the chart After compiling a list of Darden’s core competitor brands, which include Bravo Brio Restaurant Group Inc. (BBRG), Bloomin’ Brands Inc. (BLMN), Cheesecake Factory Inc. (CAKE), Texas Roadhouse Inc. (TXRH), Ignite Restaurant Group Inc. (IRG), Brinker International Inc. (EAT), and Dine Equity Inc. (DIN), we’ve added a […]
China’s key economic conditions: Industrial and electricity output
Because reporting entities sometimes like to dress their numbers up a bit to look nice, analysts also look at electricity output—where government officials say they don’t have much incentive to cook the numbers.
Why industry capacity changes also affect urea prices and profits
Generally, a capacity increase tends to lag demand growth, as producers like to see a stronger market before making significant investments.
Dry bulk shipping weekly analysis (Part 3: Construction rises)
Continued from Part 2 Ship construction activity Part 2 of this series explains how ship orders can illustrate managers’ expectations for future supply and demand differentials. But new ship orders don’t always translate into new constructions right away. Sometimes, shipping firms specify a particular date of delivery for the new orders. If the delivery date is farther […]
Orderbook shows divergence between product and crude tankers
The divergence we’ve seen between orders for product tankers and crude tankers reflects in share prices.
Current positive data shows supply to grow below 7% in 2013
In a highly commoditized industry like the shipping industry, capacity is an important metric that directly impacts companies’ top line, or revenue performance. When capacity grows faster than demand, competition will rise among individual shipping firms as they try to utilize idle ships and cover fixed costs. This will lower day rates, which will negatively […]
Chinese investing in cars and real estate drives dry bulk demand
As long as developers continue to snatch up land, more iron ore and coal will be needed at steel mills, which is generally positive for dry bulk shippers.
Darden analysis: Key benefits of a restaurant owning properties
Owning properties reduces real estate costs A restaurant business that owns its own building is a bit different from a restaurant business that rents its buildings or lands. From a business standpoint, you can think of a restaurant that owns its buildings as the sum of two businesses: restaurant and real estate. Because the real […]
We just need decent ship orders for dry bulk shippers to recover
Managers remain optimistic From September 13 to 20, ship orders for Capesize vessels fell by 0.25%, from 10.53% to 10.28%, as a share of the existing number of ships. Orders for Panamax improved from 15.34% of existing ships to 15.87%, while those for Supramax were up slightly, rising 0.04% to 4.64%. Analysts use a percent […]
Capesize rates take out 2012 high, a key driver of share prices
Taking out 2012’s high is important because it reflects tighter supply and demand dynamics than last year, which means higher revenue and earnings from Capesize vessels this year compared to 2012.
Newbuild tanker prices rose, but you should still use caution
October’s increase is generally positive for the long-term prospects of tanker stocks like Frontline ltd. (FRO) or Nordic American Tanker Ltd. (NAT).
Weekly tanker digest: Have fundamentals changed? (Part 4)
Continued from Part 3 The importance of capacity Capacity, in a commoditized industry like shipping, is an important metric that directly impacts companies’ top line, or revenue performance. When capacity grows faster than demand, competition will rise among individual shipping firms as they try to use idle ships and cover fixed costs. This will lower day […]
Why Diana will outperform Safe Bulker and Navios Maritime
The two main markets for shipping companies, such as DryShips Inc. (DRYS), Diana Shipping Inc. (DSX) and Safe Bulkers Inc. (SB), are spot (voyage) and time charter (period). Companies that engage in the spot market will charge a one-time fee that customers pay to have a specified amount of goods shipped from one destination to […]
Why low inflation reflects weak sales but is a long-term positive
CPI growth running below 2.0% The most widely reported inflation rate is the CPI (Consumer Price Index). Since May 2012, US consumer inflation (measured by the year-over-year change in the consumer price index) has generally stayed below 2.0%. In August 2013, the overall inflation rate stood at 1.5% compared to the same month last year, […]
Why potash stocks around the world crash as Uralkali leaves Belarus Potash Company
Industry concentration Industry concentration is a factor that affects competition. When only a few firms occupy a large portion of the industry’s revenue, competition tends to be less, as companies try to live with each other to maintain profits. On the other hand, when there are a large number of firms vying for market share, […]
Why shipping rates for Capesize vessels continue to outperform
Investors can look forward to higher Capesize rates during the second half of this year compared to the first half, which is positive for dry bulk shippers.
Market Realist dry bulk shipping blast (Part 6: Forward rates)
Continued from Part 5 What are forward contracts? If there are shipping rates for today, then there’s also the expectation of tomorrow’s rates. Companies use forward contracts to lock in the availability of resources in the future at a set price. The dry bulk shipping industry—which transports key dry bulk materials such as iron ore, coal, […]
Shipping stocks rise as Capesize rates approach $20,000
From August 23 to 30, shipping rates for Panamax, Supramax, and Capesize vessels stood relatively unchanged.
Iron ore shipments rose in June due to demand, positive for dry bulk shipping
China’s iron ore import data China’s iron ore import is a key driver of shipping demand, making up more than 75% of the world’s total iron ore shipments. So China’s import rising is positive for shipping rates—Capesize vessels in particular—which can give short-term support to share prices and a medium-term boost to companies’ financials. While […]
Market Realist dry bulk shipping blast (Part 5: Shipping rates)
Continued from Part 4 Supply and demand drives dry bulk shipping companies Although we must analyze demand in order to project future dry bulk shipping rates, imports data aren’t widely available on a weekly basis. But shipping rates, which reflect the difference in demand and supply, are collected on a daily basis at the London-based Baltic […]
China’s interbank lending rate falls below 6.0%, positive for dry bulk shipping?
Update to Must-know: Shipping companies hit by China’s financial woes The impact of China’s financial industry The financial industry is an essential part of any economy. Without a stable financial system—one that supplies liquidity to businesses and individuals and bridges the gap between savers and borrowers—an economy can’t function as efficiently and productively as it […]
Early July steel output falls steeply, worrisome for dry bulk shipping stocks?
China’s steel output China’s steel output is a leading indicator of iron ore and coal demand. When steel output declines, the fall is often due to adjustments to weaker demand. As China makes up 70% of the world’s total iron ore imports, lower steel output will translate to fewer iron ore imports. This will hurt […]
Why 15-year ship prices point to negative outlook for tanker stocks and earnings
Why ship prices (value) matter Ship prices (values) are often good indicators of financial health in the shipping industry. When shipping demand grows more than the supply of ships, shipping companies place additional orders of ships, which drives up purchase prices. Additionally, when firms are able to charge higher prices for transporting goods across the […]
The Baltic Dry Index fell in January but annual growth is positive
The Baltic Dry Index (a benchmark that reflects the overall shipping rate for transporting dry bulks such as iron ore, coal, and grain across the ocean) has fallen quite a bit since the start of the year.
Must-know: Shipping companies hit by China’s financial woes
The impact of China’s financial industry The financial industry is an essential part of an economy. Without a stable financial system—one that supplies liquidity to businesses and individuals and bridges the gap between savers and borrowers—an economy can’t function as efficiently and productively as it could. So, a collapse in the financial industry would grind […]
Shipping capacity growth breaks below 7%, first time since 2009
Why is capacity important? Capacity is an important factor that directly impacts companies’ top line (revenue) in a highly commoditized industry, like shipping. When capacity grows faster than what’s demanded, competition rises among individual shipping firms as they try to use idle ships and cover fixed costs. This lowers day rates, which negatively affects bottom […]
Why China’s interbank rates have an impact on dry bulk shipping companies
The impact of China’s financial industry The financial industry is an essential part of any economy. Without a stable financial system—one that supplies liquidity to businesses and individuals and bridges the gap between savers and borrowers—an economy can’t function as efficiently and productively as it could. So, a collapse in China’s financial industry would grind […]
Why high valuation and coffee prices drove Starbucks down ~13%
As store count grew over the past few years, Starbucks’ forward P/E valuation metric also expanded. What used to be just 17x gradually grew to roughly 27x, a 58% based solely on expansion in the valuations.
Shipping indexes rise, driving dry bulk shipping company shares
It’s been a while since the dry bulk shipping index has had such as large impact on the share prices of shipping companies. This reflects the fact that the market wasn’t really expecting such an increase.
7 points that reflect tanker fundamentals say recovery isn’t looming (Part 4)
Continued from Part 3 The importance of capacity Capacity, in a commoditized industry like shipping, is an important metric that directly impacts companies’ top line, or revenue performance. When capacity grows faster than demand, competition will rise among individual shipping firms as they try to use idle ships and cover fixed costs. This will lower […]
An ETF that invests in Soros’s dry bulk shipping experiment
Investors seeking exposure to dry bulk shipping who don’t want to buy six companies like Soros did can use the Guggenheim Shipping ETF (SEA).
US oil production expected to hit record in 2013, negative for tankers
US oil rig count is a leading indicator of US oil production and oil imports. Since 2008, a boom in US oil industry has negatively impacted demand for tankers (see Tankers will likely underperform dry bulk ships in 2013)— vessels that transport oil across ocean. Higher US oil production, due to application of technologies called […]
Why the OECD leading indicator drives dry bulk shipping cycles
Because the month-to-month data can contain short-term statistical noise that doesn’t reflect long-term fundamental changes, a six-month change or year-over-year change is often used.
Why you should watch 7 key industry indicators for shipping fundamentals (Part 1)
Dry bulk shipping companies lag behind economic recovery Despite the U.S. stock market surpassing its 2008 highs recently, with the Dow Jones Industrial Index hitting 15,464.30 and S&P 500 hitting 1,680.19 as of July 12, 2013, dry bulk shipping companies have done poorly. These companies primarily transport raw materials such as iron ore, coal, and […]
Why Agrium Inc. suspending capacity addition will affect other producers (Part 1)
The importance of capacity utilization Capacity utilization measures how much of an industry’s or company’s available production output is being used. It’s based on dividing actual output by potential output. Because an industry or firm will often try to match production to demand, a rising capacity utilization rate means faster growth in demand relative to […]
Short term moves in natural gas has limited impact on fertilizer costs
Natural gas is a major input in the production of nitrogenous fertilizers, such as urea and ammonia. Therefore, when the natural gas price in the United States rises, it is a negative move for producers. Natural gas price rose on the week ending March 15th The Henry Hub Natural Gas Spot Price, a benchmark for […]
Egypt tension pushes oil past $109, shipping rates rise, but downside for tankers
Tanker stocks tied to oil prices Tanker stocks often move in tandem with oil prices in a demand-driven market. But because tanker companies also use oil to run their ships, a price increase in oil due to supply shocks (such as political disruptions in the Middle East) also affects tanker firms differently. To get a […]
Low inflation supports availability of monetary stimulus, positive for shipping stocks
Inflation’s impact on spending and investment Central banks often set a target on inflation rate because a mild inflation rate encourages people to spend more, while it also points out that demand is rising more than supply—a situation that suggests a growing economy. When inflation is high, however, central banks will use monetary policies to […]
Maturing contracts present significant downside for certain shipping firms
The two main markets for shipping companies, such as DryShips Inc. (DRYS), Diana Shipping Inc. (DSX), Navios Maritime Partners LP (NMM) and Safe Bulkers Inc. (SB), are spot (voyage) and time charter (period). Companies that engage in the spot market will charge a one-time fee that customers pay to have a certain amount of goods […]
Why natural gas price affects nitrogenous fertilizer stocks (Part 1)
Natural gas and nitrogenous fertilizers Natural gas is a major raw material input in the production of nitrogenous fertilizers, such as urea and ammonia, ranging from 40% to 70% of cost of goods sold. A higher natural gas price increases the cost of goods sold and compresses margins. This in turn lowers earnings and free […]
Capacity growth portrays short-term negative but long-term positive for shipping
In a highly commoditized industry, like the shipping industry, capacity is an important metric that directly impacts companies’ top line, or revenue performance. When capacity grows faster than demand, competition will rise among individual shipping firms as they try to utilize idle ships and cover fixed costs. This will lower day rates, which will negatively […]
Recommendation: Capitalize on dry bulk shipping’s cyclical waves
The dry bulk shipping industry is cyclical mainly due to economic or business cycles as well as a long lead time between the placement of orders and the delivery of new vessels.
Shipping recovery continues with additional purchases, long-term opportunity
Ship orders apply most to long-term investments Ship orders reflect managers’ assessments of the industry’s future demand and supply balance. Dry bulk shipping companies will often place new orders when future demand is expected to increase more than supply, on the condition that they expect to generate profits with new vessels.[1. Dry bulk shipping companies […]
Mosaic and CF Industries could be severely undervalued (Part 2)
Back to Part 1 Share of market cap While $3.7 billion and $2.7 billion of cash may not seem like a lot compared to Apple’s ~$150 billion, it’s crucial for investors not to get distracted by the absolute amount. What’s important for investors is knowing how much “excess cash” they’re receiving based on how much […]
Dry bulk shipping rates rise due to restocking, but likely downside looming
The dry bulk shipping industry’s service is commoditized. So, supply and demand balance is one of the most important drivers for dry bulk companies’ top- and bottom-line performances.
2 key things that set the floor and ceiling for urea prices
Without an understanding of factors that affect crop prices, it would be difficult to formulate a view on future crop prices and demand for nitrogenous fertilizers.
Ship prices rise to 8-month high, supporting dry bulk shipping recovery
Why should you watch ship purchase prices? Purchase prices for ships are often good indicators of financial health in the shipping industry. When shipping demand grows more than the supply of ships, shipping companies place additional orders, which drives up purchase prices. Additionally, when firms are able to charge higher prices for transporting goods across […]
Why high shipping capacity growth will continue to pressure tanker earnings
Update to Shipping capacity growth drops but outpaces demand, negative for tanker stocks The importance of capacity In a highly commoditized industry, like the shipping industry, capacity is an important metric that directly impacts companies’ top line, or revenue performance. When capacity grows faster than demand, competition will rise among individual shipping firms as they try […]
Why iron ore prices rising to two-month high is positive for dry bulk shippers
Commodity prices and shipping Commodity prices are leading indicators of an economic cycle. Because suppliers of raw materials require time to ramp up production, an increase in demand during an economic expansion will often lead to higher prices. As a result, commodity prices correlate highly with shipping. Iron ore prices On July 25, the price […]
Why Capesize vessels are outperforming other ship vessels in rates
Supply and demand drives dry bulk shipping companies Unlike imports data that aren’t widely available on a weekly basis, shipping rates (which reflect the difference in supply and demand) are collected daily at the London-based Baltic Exchange and published as the BDI (Baltic Dry Indexes). These indexes reflect the daily shipping rates to transport key […]
Weaker rupee lowered farmers’ demand for potash in 2012, how about 2013?
Just like the U.S. dollar is a key influence to crop prices, the strength or weakness of the Indian currency, the rupee, has a significant impact on potash demand. As potash is traded globally, the standard currency for exchange is in U.S. dollars. When the Indian rupee weakens, it is often a negative for potash […]
Why China remains a risk for dry bulks as bank interest rate stays above average
The impact of China’s financial industry The financial industry is an essential part of any economy. Without a stable financial system—one that supplies liquidity to businesses and individuals and bridges the gap between savers and borrowers—an economy can’t function as efficiently and productively as it could. So a collapse in China’s financial industry would grind […]
Why the flat oil rig count won’t hinder product tanker demand
US rotatory rig count: The forefront of future oil production The US Crude Oil Rotary Rig Count is a valuable indicator that shows how much drilling activity is occurring in the United States, tracking the number of rotating drills that are drilling into the Earth’s crust in search of oil or developing oil wells. The […]
Contrarian approach: why high valuation multiple is positive for shipping stocks (dry bulk)
Valuations can often tell investors the outlook of equities in the near future. Although value investors often look for valuations that are low, high valuations can often signal better times ahead. This is especially true for cyclical companies, such as steel producers and shipping companies, as has been mentioned by Peter Lynch in his famous […]
Must-read: Financial woe abroad drags tankers down, outlook negative
Continued from Why oil price is a key driver of tanker stocks The impact of China’s financial industry The financial industry is an essential part of any economy. Without a stable financial system—one that supplies liquidity to businesses and individuals and bridges the gap between savers and borrowers—an economy can’t function as efficiently and productively […]
Why investing in seed is different than investing in fertilizer (Part 1)
Investing in fertilizers and seed stocks Fertilizer and seed stocks are both part of the agriculture industry. As they highly correlate with each other, investors tend to think investing in one is like investing in the other. From September 2005 to mid-2012, the correlation between the two industries, using major companies’ share prices, was 0.86.[1. […]
Panamax vessel price reveals low dry bulk orders, negative implication
The price of a Panamax ship depends on two factors: the amount of cash the ship can generate within its useful life and the cost of steel.
Weekly tanker digest: Have fundamentals changed? (Part 2)
Continued from Part 1 The significance of ship orders One measure that reflects managers’ assessment of future supply and demand differences is the number of ships on order. When managers expect future demand to increase more than supply, if they also expect to generate profits with the investment, they will often place new ship orders. But […]
China might cut its urea export tax in 2015, helping Agrium and CF
Industry experts often show ex-China global urea capacity utilization because China’s export tax makes domestic producers’ urea more expensive for international buyers.
Why investing in seed is different than investing in fertilizer (Part 2)
Continued from Part 1 Monsanto and DuPont Two industry giants dominate the seed industry, Monsanto Co. (MON) and DuPont (DD), which together held ~62% of the industry’s revenue in 2012. Why are these two companies dominant players in the industry? Let’s explore. Patent protection One big differentiator between seed and fertilizer stocks is patentability. Companies […]
Shipping industry recovery is real, but timing remains uncertain
Ship orders reflect managers’ assessments of the industry’s future demand and supply balance. Dry bulk shipping companies will often place new orders when future demand is expected to increase more than supply, on the condition that they expect to generate profits with new vessels.[1. Dry bulk shipping companies engage in the transportation of dry raw […]
Mosaic and CF Industries could be severely undervalued (Part 5)
Continued from Part 4 Why buy back? Investors may wonder why Mosaic Co. (MOS) is looking to buy back shares instead of distributing the earnings as dividends. From a company’s standpoint, the value of the company in the market today doesn’t matter. Whether it returns cash when the share prices are high or low, it […]
Weekly product tanker capacity growth rises, crude tanker falls
While annual capacity growth still remains above 3.5% for crude tankers and even higher for product tankers, it has come down since April, which is a positive sign.
Dry bulk shipping weekly analysis (Part 10: Ship prices)
Continued from Part 9 Why should you watch ship purchase prices? Purchase prices for ships are often good indicators of financial health in the shipping industry. When shipping demand grows more than the supply of ships, shipping companies place additional orders, which drives up purchase prices. Plus, when firms are able to charge higher prices […]
Dry bulk shipping at inflection point, order trend remains positive
Ship orders are useful metrics in uncovering managers’ perspectives of the industry’s long-term demand and supply balance. Dry bulk shipping companies will often place new orders when future demand is expected to increase more than supply, on the condition that they expect to generate profits with new bulk vessels.[1. Dry bulk shipping companies engage in […]
Frontline has options, but they’ll likely put the company behind
There are several things Frontline can do to pay its maturing $190 million bonds. But activities such as selling assets or raising additional capital would likely put Frontline behind its peers.
Key tanker stock drivers: China’s crude oil import volume
China’s crude oil import: The most important factor An indicator that has a first-degree (direct) influence on tanker rates is China’s crude oil import volume. When import volume rises, more tankers will be in use, which pushes up shipping rates. Conversely, lower import volume means an increased number of idled ships, which leads to increased […]
Crude tanker index 25% lower, product tanker index steady
On August 30, the Baltic Dirty Tanker Index and Baltic Clean Tanker Index stood at 622 and 604, respectively.
Must-know: Mosaic’s forecast shows a possible upside limit in 2015
Despite a recovery in 2014, investors should be warned about the longer-term outlook for the potash business.
Why the US dollar affects fertilizer producer stocks and ETFs
As commodities trade globally, often using the US dollar as a medium, price movements in the US dollar have important consequences for fertilizer producers.
Why Chinese producers pressure global fertilizer prices
The operating rate in China is below average Historically, the expense of using coal to produce nitrogen-based fertilizers has kept Chinese firms away from increasing production, because they would have had to sell the fertilizers at a loss. As a result, the operating rate (capacity utilization) in China has been lower than the rest of […]
Why weak 3rd-quarter potash sales volume will only be temporary
The importance of sales volume Companies’ sales and earnings revisions often have significant impact on share prices. Sometimes companies will announce revisions before earnings calls if they’re significant. When earnings are expected to be worse than initially mentioned, share prices can take a hit. Conversely, when management releases upbeat revisions, share prices often jump. Companies […]
Must-know: 3 important things that could drive Darden up 45%
However, shares do tend to fall following spinoffs, as they’re widely considered an inefficient means of distributing shares to investors.
Must-know: Weekly dry bulk shipping industry fundamentals update (Part 2)
Continued from Part 1 The importance of ship orders One measure that reflects managers’ expectation of future supply and demand differences is the number of ships on order. When managers expect future supply to increase more than demand, they refrain from purchasing new ships. However, when they expect demand to outpace supply growth, companies return to […]
Are McDonald’s higher sales in Europe part of a larger trend?
In this series, we uncover the key indicators investors should know to help them stay calm and position themselves correctly in the restaurant market. Investing is an art and a science. There is no secret formula.
Dry bulks: NMM’s CEO says “we’re in a very early stage of recovery”
Investors should recall that the shipping industry is highly cyclical, as demand for fleets is driven by economic cycles and supply is inelastic for about two years—the time it takes to build vessels.
Why it pays to be patient about China’s manufacturing activity
Because China is the largest importer of raw material in the world, China’s manufacturing is a key driver that affects shipping demand and rates.
Must-know: Why the U.S. could hit a light crude oil refining wall
While U.S. oil imports have been falling over the last few years, tanker companies could benefit from a brighter outlook on U.S. oil imports in 2014.
Wholesale ammonia prices have been crashing
Ammonia prices Wholesale ammonia prices are a key driver of revenue for fertilizer companies, such as CF Industries Inc. (CF), Agrium Inc. (AGU), Potash Corp. (POT) and Rentech Inc. (RTK). Naturally, higher ammonia prices are positive for these nitrogenous fertilizer producers’ revenues, earnings, cash flows and share prices. But lower prices are negative. Falling wholesale […]
Why Boston Beer Company is playing the Japanese car strategy card
Investors shouldn’t only expect Boston Beer Company’s sales growth of approximately 17% to translate into equal growth in earnings.
Why are economical potash deposits concentrated in 3 locations?
Canada, Russia, and Belarus together account for more than 89% of the world’s estimated reserves and a little over 66% of global capacity.
Why we could see fewer volatile swings in dry bulk shipping stocks
The recent volatility we’ve seen among dry bulk shippers can scare people into thinking they should trade in and out of the stock.
Why Capital Product Partners didn’t rally after beating estimates 400%
Beating estimates Let’s begin with earnings since that’s often what analysts and investors look at. For the third quarter of 2013, which was released on October 31 in the morning, CPLP reported basic EPS of $0.35 per share, which was five times more than the estimate of $0.07 per share. Basic EPS of $0.35 a […]
U.S. oil production could slow in 2014, benefiting crude tankers
As oil production appears to be lagging oil rig count by two to three years, U.S. oil production growth could start to show signs of slowing in 2014. That could be positive for demand for crude tanker companies.
The Fed taper and Indian rupee could still hurt potash companies
The Indian rupee has been under pressure this year due to two key factors: Ben Bernanke’s announcement of the Fed tapering that started off in June and deteriorating economic growth combined with high inflation.
Low US natural gas price should continue to benefit domestic fertilizer producers
Natural gas is a major input in the production of nitrogenous fertilizers, such as urea and ammonia. According to Terra Nitrogen Company L.P.…
Analysts’ demand estimates favor potash over other fertilizers
When looking at an industry, one of the first things investors can look at is demand growth. Just like an eight percent increase in gross domestic product…
US phosphate inventory hitting previous highs
The phosphate industry is quite oligopolistic, meaning a handful of firms control most of the supply, with 5 major companies producing 75% of the world’s supply.
Corn price hits record in 2012, favorable for fertilizers
Corn prices often drive fertilizer prices. Among the three major crops, corn, soybean and wheat, corn requires more nitrogen based fertilizers.
Brent crude oil moves nitrogenous fertilizer prices
Brent crude oil price is a leading indicator for nitrogenous fertilizer revenues. When the price of Brent oil rises, it’s generally followed by a rise in ammonia prices.
Darden analysis: Darden must increase or decrease average check
The eroding middle market Darden’s core brands—Olive Garden, Red Lobster, and LongHorn Steakhouse—face a macro shift in an ever-widening spread in US average income. The graph below shows the difference in household income between the second highest 20% and the second lowest 20% income earnings. The difference is divided by the average income of the […]
Thermal coal prices hit $80.60, positive for fertilizer stocks
So far, global economic growth is expected to pick up in 2014. This case would generally be positive for commodities like coal.