Intrepid Potash Inc

The world has a problem that’s actually good for the fertilizer industry. This is the world’s population, which is ever-growing, as is food consumption.

In the Cornbelt region of the US, the potash prices rose by 31 basis points to $289 per metric ton from $288 per metric ton.

The week ending November 2 was broadly positive for the agribusiness sector. The VanEck Vectors Agribusiness ETF (MOO) rose ~4.5%.

In the week ending October 26, overall urea prices were broadly negative.

Last week, the overall agribusiness sector was broadly negative. The VanEck Vectors Agribusiness ETF (MOO) fell ~4.9%.

Last week, which ended October 12, fertilizer affordability was unchanged week-over-week.

Potash prices in Brazil rose the most last week with a rise of 2.3% to $357 per metric ton from $349 per metric ton.

While the Fertilizer Affordability Index was below one, it’s still higher compared to the average levels observed since January 2016.

Fertilizer affordability affects sales volume for fertilizer companies (NANR) such as Mosaic (MOS), Nutrien (NTR), CF Industries (CF), and Intrepid Potash (IPI).

DAP (diammonium phosphate) prices have been rising lately.

Last week, which ended September 7, the VanEck Vectors Agribusiness ETF (MOO) fell 1.8%, while the S&P 500 Index fell 1%.

In Europe, the cost of natural gas rose by 53% year-over-year as of June 2018.

CF Industries reported sales growth of 16% year-over-year in the second quarter due to the increase in realized fertilizer prices across its five segments.

The fertilizer sector remained under pressure between August 3 and August 13, with the benchmark VanEck Vectors Agribusiness ETF (MOO) declining 2.4%

The potash market was no different than nitrogen and phosphate. Potash prices were depressed due to oversupply.

Nutrien (NTR) reported its second-quarter earnings on August 1 after the market closed.

MAP (monoammonium phosphate) prices continued to inch higher last week and hit new highs.

Like CF Industries’ (CF) sales, its margins are also expected to expand YoY (year-over-year) in Q2 2018 and the next four quarters.

In the near term, analysts’ estimates for Intrepid Potash’s (IPI) sales fail to show a positive momentum.

Intrepid Potash (IPI) is set to release its second quarter 2018 earnings on August 1. Analysts are estimating EPS of $0.04.

Agrible’s technology gives a digital dimension to farming activity by driving efficiency in decision-making.

Last week, which ended July 13, was broadly negative for the agribusiness sector. The broader market index was positive.

In recent weeks, potash prices have been rising and hitting YTD (year-to-date) highs.

In this series, we’ll look at key NPK (nitrogen, phosphorous, and potassium) fertilizer prices last week.

Last week, potash prices in the NOLA (New Orleans) region of the United States rose 1.6% week-over-week to $235 per metric ton.

Last week, potash prices were also broadly positive and managed to make new highs so far year-to-date.

On June 25, the stock market continued to bleed due to risks from the escalating trade. The S&P 500 Index (SPY) fell almost 1.3%.

CF Industries’ valuation multiples have risen across the board since February 2016 and have broadly moved sideways since then.

CF Industries (CF), one of the major nitrogen producers in North America, has had a bumpy ride since 2015.

Intrepid Potash (IPI) reported its earnings on April 24 before the market opened.

For 1Q18, Mosaic is estimated to post $1.8 billion in sales, which would represent a 12% increase from $1.6 in 1Q17.

CF Industries (CF) reported its 1Q18 earnings on May 2, after the market closed.

While nitrogen and phosphate prices at some locations experienced a weekly increase, potash prices were broadly flat to negative week-over-week.

For 1Q18, CF Industries’ EBITDA (earnings before interest, tax, depreciation, and amortization) are estimated to grow year-over-year by 22% to $333 million from $272 million a year ago.

Last week, most fertilizer stocks ended in positive territory. Intrepid Potash (IPI) was the biggest gainer, rising 4.3% to $4.20.

Last week, potash prices remained strong with overall flat to positive movement. Prices in Brazil and Southeast Asia remained particularly strong week-over-week.

In the week ended April 6, DAP (diammonium phosphate) prices were broadly flat to negative.

In the week ending March 30, 2018, potash prices were broadly flat to positive. Last week, the prices were also strong YoY (year-over-year).

In the week ending March 30, 2018, MAP prices in Brazil remained flat week-over-week at $426 per metric ton from a week ago.

The Fertilizer Affordability Index rose slightly to 0.67x last week from 0.66x a week ago. The index level stood at 0.7x a month ago and 0.61x a year ago.

Intrepid Potash (IPI) saw the steepest increase in prices year-over-year by ~34% to $224 per metric ton from $168 per metric ton a year ago in 4Q16.

Overall shipments in 4Q17 for five companies fell ~13% year-over-year.

Last week, phosphate prices for both DAP (diammonium phosphate) and MAP (monoammonium phosphate) continued their upward momentum.

So far this year, some major agribusiness stocks, particularly in the fertilizer sector, have performed poorly.

In the week ending February 16, potash prices were broadly flat to positive compared to a week ago.

In the week ending January 26, potash prices at the locations discussed below were broadly flat to positive and remained strong compared to levels observed a year ago.

SMG said it intends to pass on the benefits from tax savings to its employees by increasing salaries and through other programs.

Potash prices remained strong in the week ending January 19.

In Brazil, potash prices were flat at $281 per metric ton in the week ending January 12.

The potash fertilizer prices for both granular and standard grade were comfortably higher compared to the levels observed last year around the same week.

For the week ending January 5, 2018, the VanEck Vectors Agribusiness ETF (MOO) ended almost 2% higher, while the S&P 500 Index (SPY) rose 1.7%.

Intrepid Potash (IPI) shifted its focus to produce trio. Besides trio, the company continues to diversify its income sources.

Intrepid Potash was one of the top performers in 2017. Its stock rose ~127% YTD from $2.1 on January 3, 2017, to $4.72 at the closing on December 28.

In the earlier parts of this series, we saw how CF Industries (CF) sales performed as a result of movements in fertilizer prices and shipment volumes.

The remaining companies In this part, we’ll compare the five remaining agribusiness companies’ valuation, again using forward EV-to-EBITDA (enterprise value-to-earnings before interest, tax, depreciation, and amortization) multiples. Valuation multiples As shown in the above chart, the remaining companies’ valuation multiples have risen in the last two years. At 18.3x, FMC (FMC) was trading at a premium to the peer […]

Earnings per share Earlier, we discussed major agribusiness companies’ earnings, which have mostly fallen over the years. In 2018, their earnings are expected to rise. Next-12-month earnings As shown in the above chart, agribusiness companies’ NTM (next-12-month) EPS (earnings per share) are expected to improve year-over-year. FMC’s (FMC) EPS are expected rise 90% to $4.70, Agrium’s […]

Potash in 2018 Earlier in this series, we reviewed potash prices in 2017. We saw that prices rose for key players in the second half of 2017. Could this momentum continue in 2018? Factors driving potash prices Prices are driven by supply and demand. Whereas for fertilizers (XLB), global demand usually grows at a stable rate, this […]

Potash fertilizers Most of the fertilizer companies we’ve discussed in this series sell all or some of the three NPK (nitrogen, phosphorous, and potassium) macronutrients. To learn more about these macronutrients’ key role in agriculture, read Agricultural Fertilizer Industry: Your Comprehensive Overview. In this part, we’ll look at what 2017 meant for potash producers. Price trends […]

Last week, granular potash prices at NOLA (New Orleans) rose 1.3% to $207 per metric ton from $204 per metric ton a week ago.

Last week, which ended December 8, 2017, overall potash prices were broadly flat to positive at the four locations we’re covering in this series.

CVR Partners (UAN) emerged as the top gainer last week, rising 17.4% week-over-week to close at $3.70. CF Industries (CF) followed, rising 4.4% to close at $39.30.

PotashCorp’s (POT) CEO (chief executive officer) Jochen Tilk said potash prices for the company were 20% higher year-over-year, driven by higher affordability and tight supply.

Last week, the granular MOP (muriate of potash) prices in NOLA (New Orleans) in the US (NANR) rose by as much as 45 basis points week-over-week to $203 per metric ton.

PotashCorp owns 28% of Arab Potash and can appoint three of the latter’s 12 board members. It can also reportedly appoint senior management positions.

On September 12, 2016, PotashCorp and Agrium announced their intention to combine in a merger of equals. But China and India have set conditions.

The potash prices in the Cornbelt region were flat at $231 per metric ton. It was the sixth consecutive week that potash prices were mostly unchanged.

In the week ending November 17, most of the agricultural fertilizer stocks ended in negative territory. Intrepid Potash emerged as the biggest loser.

The median gross margin for the potash segments of the five companies in the above chart was 24%. A year ago, in 3Q16, the median was 9%.

Potash price realizations for fertilizer companies were significantly higher YoY (year-over-year) in the third quarter of 2017.

In the week ending November 3, agricultural fertilizer stocks were broadly positive.

Overall, CF Industries’ (CF) gross margins continued to be pressured by lower fertilizer prices. The company’s overall margins were almost flat year-over-year.

For Mosaic, the Phosphate segment’s shipments suffered the most. The segment fell as much as 17% YoY to 2.1 million tons from 2.5 million tons.

Potash fertilizers (XLB) have shown strength so far this year, which was evident in the earnings of PotashCorp (POT), one of the largest producers of potash fertilizers globally.

Last week, the VanEck Vectors Agribusiness ETF (MOO) closed 40 basis points higher from the start of the week. The S&P 500 Index (SPY) ended the week 62 basis points higher.

PotashCorp’s (POT) Potash segment sales grew by ~9% YoY to $1.2 billion in 3Q17. Strong shipment volumes and price growth drove this growth.

PotashCorp is expected to report an EPS of $0.11, which will be flat compared to 3Q16. However, earnings growth is expected in the next four quarters.

Potash prices continued to show strength in the week ending October 13. The prices continue to support companies’ volume growth.

Potash prices remained firm last week, which was a trend we’ve seen in potash prices for the most part of this year.

In the week ending October 6, the VanEck Vectors Agribusiness ETF (MOO) fell by seven basis points from the beginning of the week.

Overall, CF Industries’ shipments rose 11% YoY (year-over-year) in 2Q17 to ~5 million tons. While the shipments grew YoY, the sales didn’t grow.

Last week, potash prices in the Cornbelt region of the US moved sideways week-over-week to $230 per metric ton.

Fertilizers have displayed a high level of affordability this year, which has supported the strong demand for fertilizers.

Fortunately for fertilizer producers, potash prices have offset some of the negative impact from nitrogen and phosphate fertilizers.

For the week ending August 18, fertilizers continued to become less affordable. Fertilizer affordability can help indicate the demand for fertilizers.

Last week, potash prices in the Brazil region remained unchanged at $265 per metric ton—the 13th week that prices in Brazil moved sideways.

Given the growth in potash shipments and the increase in price realization, it’s natural that the margins of potash producers improved YoY in 2Q17.

Despite a sales decline and lower year-over-year price realization, Agrium’s (AGU) margins saw an improvement during 2Q17.

Intrepid Potash’s 2Q17 price realizations for its Potash segment were significantly better compared to 2Q16.

Mosaic’s gross margins expanded from 9% in 2Q16 to 12% in 2Q17.

Last week, the Fertilizer Affordability Index rose by as much as 5.7% week-over-week to 0.56x from 0.53x last week.

For the week ended July 28, MOP (muriate of potash) prices in the Corn Belt region of the US saw positive momentum with increases by as much as 1.6% week-over-week.

The week ending July 28 was mostly negative for agricultural fertilizer stocks.

Earlier in this series, we saw how Mosaic’s (MOS) top line is expected to grow in 2Q17 and how the top-line growth translates into margin growth for the company.

The Mosaic Company (MOS) mainly produces and sells phosphate and potash fertilizers. The company is one of the largest producers of phosphate….

PotashCorp (POT) had lackluster earnings growth last year. However, the company reported EPS (earnings per share) growth in 1Q17.

PotashCorp’s gross margins are expected to improve in its 2Q17 earnings. Analysts expect its gross margins to rise to 28% on gross income of $296 million.

Unlike the nitrogen and phosphate fertilizer prices, potash fertilizer prices have remained relatively stable so far in 2017.

Intrepid Potash’s (IPI) gross margin for its Potash segment swung to positive territory in 1Q17, while its Trio margins were in the negative territory.

Between Intrepid Potash’s (IPI) two operating segments—Potash and Trio—the sales share of Trio has been expanding.

Realized prices for fertilizer companies are the main culprit for the dismal performances among companies in the agricultural fertilizer sector.