Global X Fertilizers/Potash ETF
Sales Drivers and What to Expect for Fertilizer Companies
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.
Top 10 Agricultural Chemicals Stocks Include Scotts Miracle-Gro
Over the past ten-year period, Scotts Miracle-Gro has risen 193.0% and significantly outperformed the S&P 500 Index’s rise of 69.2% over the same period.
What’s Compass Minerals Doing to Gain a Cost Advantage?
Led by its superior assets, location, and geological advantages, Compass Minerals holds a competitive position with a wide economic moat rating.
Analyzing Scotts-Miracle Gro’s Sales
During 3Q17, Scotts Miracle-Gro’s overall sales rose 8% YoY (year-over-year) to $1.08 billion from $994 million in 3Q16.
Comparing Phosphate Prices for Key Players in North America
Ammonium phosphates are the most widely used phosphate fertilizers in the world. DAP is the most used among phosphate fertilizers.
Comparing Fertilizer Companies’ 1Q17 Nitrogen Gross Margins
Terra Nitrogen (TNH) emerged on top with a gross margin of 39%. However, the company’s gross margins were slightly lower from 40% YoY (year-over-year).
Mosaic’s Price Target Cut to $27 following Its 1Q17 Earnings
Much like Agrium (AGU), The Mosaic Company (MOS) had a disappointing 1Q17. Mosaic reported flat or no earnings per share (or EPS), missing analysts’ consensus estimate of $0.17.
Phosphate-DAP Prices Continue to Be Bad News for Mosaic
Overall, DAP prices at four locations fell 86 basis points week-over-week. Prices at the US Gulf NOLA fell 128 basis points week-over-week to $279 per metric ton.
No Surprise: Mosaic’s Margins Contracted
Overall margins for Mosaic (MOS) contracted significantly year-over-year.
What Boosted Agrium’s Sales in 1Q17?
In 1Q17 alone, the retail segment contributed more than 80% to Agrium’s overall sales.
Why Did Phosphate Prices Trend Lower Last Week?
DAP prices at the Central Florida location fell as much as 1.5% week-over-week to $299 per metric ton from $304 per metric ton.
Analysts Revise CF Industries’ Price Target
With the latest available recommendations on April 26, 11 analysts—the majority— had a “hold” recommendation on CF Industries.
How PotashCorp’s Nitrogen Shipments Performed in 1Q17
PotashCorp’s Nitrogen segment sales fell ~11% YoY to $365 million, as compared to $412 million in 1Q16.
What Lifted PotashCorp’s 1Q17 Earnings in 1Q17?
In 1Q17, PotashCorp’s sales fell ~8% YoY to $1.1 billion, as compared to $1.2 billion in 1Q16.
Inside Mosaic’s Margins for 1Q17 and Fiscal 2017
For 1Q17, analysts estimate that Mosaic (MOS) will report gross income of $181 million—down from $237 million in 1Q16.
DAP Prices: Why Last Week Was Broadly Negative
For the week ending April 21, DAP prices were mostly negative. Overall, prices fell by as much as 52 basis points week-over-week.
Natural Gas Prices Fell for the Week Ending April 21
Natural gas prices trended lower week-over-week for the week ending April 24. Summer months are usually less demanding for natural gas.
What Analysts Estimate for Agrium’s Gross Margins in 2017
Agrium’s (AGU) gross margins in 2016 stood at 24.8%, a 26.3% fall from 2015.
How PotashCorp’s Valuation Multiple Compares with Peers
PotashCorp’s (POT) EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) multiple has trended higher in 2016.
What Analyst Estimates for PotashCorp Sales Suggest
PotashCorp’s (POT) sales are distributed equally among its three product segments: Nitrogen, Phosphorous, and Potassium.
Analyzing DAP Prices for the Week Ending April 14
Morocco saw its DAP prices fall by as much as 79 basis points to $379 per metric ton from $382 per metric ton week-over-week.
Analysts’ April Recommendations and Targets for Intrepid Potash
Intrepid Potash (IPI) has by far been the worst performer among potash fertilizer producers such as PotashCorp (POT), Agrium (AGU), and The Mosaic Company (MOS).
Analysts’ April 2017 Recommendations and Targets for Agrium
Earlier in this series, we discussed analysts’ recommendations and price targets for PotashCorp. In this article, we’ll discuss the same for Agrium (AGU), which is close to merging with PotashCorp.
Analyzing Natural Gas Prices for the Week Ending April 7
Last week, as reported by the EIA, natural gas prices at Henry Hub rose 1.3% week-over-week to $3.03 per MMBtu (million British thermal units).
Granular Urea Prices Rose for the Week Ending April 7
Urea prices in the US Gulf NOLA rose 4.8% week-over-week to $197 per short ton. Prices in the Middle East rose 3.1% week-over-week to $200 per metric ton.
Suffering Potash? Where It’s Headed in 2017
For 2017, Mosaic (MOS) forecasts that global potash demand to be in the range of 61 million–63 million metric tons. This level would be higher than in 2016.
Behind Monsanto’s Margin Growth in Fiscal 2Q17
In fiscal 2Q17, Monsanto’s (MON) overall company margin, from both segments combined, grew from 57.33% to 58.18% YoY (year-over-year).
Why Did Urea Prices Fall Last Week?
Lately, Urea prices have been under pressure due to excess capacity. Prices continued to show signs of ongoing weakness last week.
Analysts’ Recommendations and Price Targets for PotashCorp
Analysts’ recommendations On March 29, 2017, of the 18 analysts surveyed by Reuters, two had “strong buy” recommendations for PotashCorp (POT), while three had “buy” recommendations for the company for the next 12 months. Meanwhile, 11 analysts had “hold” recommendations on the stock, and only two had “sell” recommendations on the stock. Peer comparison Like […]
Comparing PotashCorp’s Returns
PotashCorp returns So far in this series, we’ve compared PotashCorp’s (POT) performance with peers’. We’ve also learned that the agricultural fertilizer industry has been at the bottom of its business cycle. Investors’ returns have taken a hit, and so has confidence in the uptick of the industry. Let’s discuss these returns in more detail. Returns […]
Could PotashCorp’s Earnings Turn the Corner in 2017?
Earnings So far in this series, we’ve discussed how PotashCorp’s (POT) sales have fallen, and its margins have narrowed over the past five years. This descent had a direct impact on the company’s bottom line, with fiscal 2016’s being hit the worst. The decline In 2016, PotashCorp reported EPS (earnings per share) of $0.51 earnings […]
2017 Sales Outlook for PotashCorp and Peers
Sales breakup PotashCorp’s (POT) sales are distributed equally among its three product segments—Nitrogen, Phosphorous, and Potassium. PotashCorp’s overall sales have been following a downward trend, and all three product segments have contributed to this decline. Sales decline In 2016, PotashCorp’s overall net sales fell significantly, by 32% YoY (year-over-year) to $3.9 billion. On average, the […]
Analysts’ Recommendations and Price Targets for Monsanto
Analysts’ consensus price target for Monsanto is $122.70 per share over the next 12 months.
Are President Trump’s Tax Cut Ambitions in Trouble?
The US is among the few countries with a corporate tax rate higher than 35%. President Trump promised to lower overall tax rates for corporates to 15%.
Fertilizers Were Affordable for the Week Ending March 24
In the week ending March 24, the Fertilizer Affordability Index rose slightly to 0.62x from 0.61x the previous week. Last year, the index stood at 0.66x.
Intrepid Potash’s Next-12-Month Recommendations and Price Targets
Of the four analysts surveyed by Reuters on March 23, 2017, none had “strong buy” or “buy” recommendations on Intrepid Potash (IPI) for the next 12 months.
What Are Investors Paying for Intrepid Potash?
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).
Why Intrepid Potash Shifted Its Product Focus
Potash’s market (SOIL) includes big fish such as PotashCorp (POT), The Mosaic Company (MOS), and Agrium (AGU), along with international players.
Analysts’ Recommendations and Price Targets for CF Industries
On March 21, 2017, of the 18 analysts surveyed by Reuters, one had a “strong buy” recommendation on CF Industries, while five had “buy” recommendations on the company for the next 12 months.
Why Were Fertilizers More Affordable Last Week?
In the week ending March 17, 2017, the Fertilizer Affordability Index fell to 0.61x from 0.63x the previous week—better than last year.
Nitrogen Fertilizers: Natural Gas Prices Rose Last Week
Last week, average weekly natural gas prices at Henry Hub rose by an average of 9% to $2.75 per MMBtu—compared to $2.52 per MMBtu the previous week.
Intrepid Potash Has No Analyst ‘Buy’ Recommendations
On March 13, 2017, none of the five analysts covering Intrepid Potash (IPI) gave the stock a “buy” recommendation over the next 12 months.
PotashCorp’s Price Target Rose Slightly in March 2017
On March 14, 2017, five of the 19 analysts covering PotashCorp (POT) recommended either a “strong buy” or a “buy” for the stock. In February, six analysts made this recommendation.
How Phosphate Prices Moved for the Week Ended March 10
The week ended March 10, 2017, was mostly flat to positive for DAP. Phosphorus fertilizers (SOIL) are becoming more important as the awareness of balanced NPK fertilizer application grows.
Scotts Miracle-Gro: Analyst Recommendations and Target Prices
Analyst recommendations for Scotts Miracle-Gro (SMG) have trended with earnings estimates, with more analysts recommending a “buy” for the stock.
How Scotts Miracle-Gro Is Embracing Cannabis
When the use of cannabis was made legal in Colorado in 2012, it opened a window of opportunity for businesses such as Scotts Miracle-Gro.
Fertilizer Sells: 8 Companies’ Sales in 4Q16
Median fertilizer sales fell 10% YoY in 4Q16, but this was still a significant improvement from the 18% fall in sales in 1Q16.
Potash Prices Rose during the Week Ending March 3
For the week ending March 3, 2017, potash prices were flat to positive. In the US Corn Belt, average weekly granular potash prices rose 3.2%.
Nitrogen Fertilizer Input: Natural Gas Prices Fell Last Week
Based on EIA data last week, average weekly natural gas prices at Henry Hub fell 9% to $2.62 per MMBtu—compared to $2.87 per MMBtu the previous week.
Demand and Supply Outlook for Potash in 2017
According to PotashCorp, the outlook for potash appears positive in 2017. North America, Latin America (especially Brazil), India, and China have been running low on inventory.
Urea Prices Reversed in the Week Ended February 24
Urea is the most globally used nitrogen fertilizer.
Analyst Estimates for IPI’s Free Cash Flow Growth in Next 4 Quarters
For 4Q16, Wall Street analysts expect Intrepid Potash (IPI) to report flat free cash flow, which would be better than the company’s -$29 million in free cash flow in 4Q15.
Intrepid Potash’s Earnings Slated to Improve in the Next 4 Quarters
Over the past four quarters, Intrepid Potash has reported a loss of $0.88 per share, down from its EPS of $0.03.
Monsanto: Analyst Recommendations, Price Target for February
On January 5, 2017, Monsanto (MON) announced its fiscal 1Q17 earnings. EPS was $0.21 per share, which was better than analysts’ estimate of flat earnings.
PotashCorp: Analyst Recommendations, Price Target for February
PotashCorp reported diluted EPS (earnings per share) of $0.07 for 4Q16, which missed analysts’ estimate of $0.09 per share.
What Were CF’s Gross Margins for Its Products in 4Q16?
Overall, CF Industries’ gross margins per product ton for each segment suffered significantly during 4Q16.
How Do Analysts View CF Industries?
On February 10, 2017, six analysts recommended either a “strong buy” or a “buy” for CF Industries (CF) stock.
Analysts Estimate CF Industries’s Revenues Could Fall in 4Q16
With respect to CF Industries’s (CF) upcoming 4Q16 earnings, Wall Street analysts expect the company to report total sales of $908 million from all segments.
Why Sales for Mosaic’s Phosphate Segment Fell 13%
Mosaic’s realized DAP prices fell significantly in 4Q16, as much as 22.7% YoY to $317 per metric ton.
Mosaic’s Price Target and Recommendations
On February 2, 2017, only three of the 20 analysts covering Mosaic (MOS) stock gave the company a “strong buy” to a “buy” recommendation for the next 12 months.
What Do Analysts Expect for Mosaic’s 4Q16 Gross Margin?
Wall Street analysts estimate that Mosaic (MOS) could report gross income of $209 million, which represents a 41% year-over-year fall from $355 million in 4Q15.
Why Scotts Miracle-Gro’s Sales Rose 27% in 1Q17
Scotts Miracle-Gro (SMG) primarily sells its products in North American and European Union markets.
PotashCorp’s Margins Contract, but How Much?
Year-over-year, each of PotashCorp’s three segments experienced a margin contraction in 4Q16. How has that affected PotashCorp (POT)?
What Investors Are Paying for Scotts Miracle-Gro
On January 25, Scotts Miracle-Gro was trading at a forward price-to-earnings multiple of 22.5x.
What Analysts Expect for SMG’s 1Q17 Revenue
For 1Q17, Wall Street analysts expect Scotts Miracle-Gro to report $233 million in revenue, which would be a 5.3% decline compared to $246 million in 1Q16.
Monsanto: Analyst Recommendations and Price Target
Of the 18 Wall Street analysts covering Monsanto, three of them have given the stock a “strong buy,” and eight have given it a “buy” for the next 12 months.
Mosaic: Analyst Recommendations and Price Target
As of January 23, 2017, three of the 20 analysts covering Mosaic (MOS) have given it a “strong buy” to a “buy” recommendation for the next 12 months.
Phosphate Fertilizers Saw Positive Gains Last Week
For the week ending January 20, 2017, diammonium phosphate price movements were mostly positive. They rose 1.9% compared to the previous week.
Why Corn Prices Moved Higher in January
Global corn prices are significantly lower than they’ve been for the past four years, considering the high global corn stock-to-use ratio last year.
What Analysts Recommend for PotashCorp
As of January 18, 2017, six analysts have recommended either a “strong buy” or a “buy” for PotashCorp (POT) stock, although the majority still recommend a “hold.”
PotashCorp’s Cash Flows: Could They Grow in 2017?
For 4Q16, Wall Street analysts are expecting PotashCorp to report $300.0 million in free cash flow, which is a rise of 44.0% year-over-year.
Analyst Estimates for PotashCorp’s 4Q16 Earnings per Share
Over the past 16 quarters, or four years, PotashCorp’s (POT) EPS has fallen an average of 25.0% year-over-year.
Potash Prices Showed Little Movement Last Week
For the week ended January 13, 2017, potash prices were largely flat to positive. In the US Corn Belt, average potash prices were $224.90 per metric ton.
Potash Fertilizer Cost Drivers and Production Flow
Potash salts are the key cost of production for potash, so most producers have an integrated production.
Who Are the Biggest Players in the Fertilizer Industry?
There’s a handful of big players in the agricultural fertilizer industry. Setting up business requires huge capital, which makes for a high barrier to entry.
Breaking Down Types of Key Fertilizers Used Today
There’s a constant need to bring up the fertility levels necessary to grow crops, and that need is fulfilled by fertilizers.
What’s Driving Food Consumption?
Most of the increase in food requirement will take place in developing countries because the standard of living is expected to improve in those countries.
Potash Prices Remain Muted for the Week Ending January 6
Average weekly prices in Brazil were flat at $237 per metric ton. Standard MOP prices in Southeast Asia also fell by 41 basis points to $243 per metric ton.
Digging into Monsanto’s Cost of Doing Business
Monsanto’s intellectual property on different crops and traits gives it the ability to charge a premium. Let’s have a look at Monsanto’s cost structure.
This Segment Has Become Important for Monsanto in the Last Decade
Monsanto (MON) conducts its global sales through two broad segments known as the Seeds & Genomics and Agricultural Productivity segments.
How Monsanto’s Sales Have Trended over the Past Decade
Since Monsanto’s (MON) beginnings in 1901, the company has evolved, undergoing technological innovations in the agricultural seed and traits business.
Comparing Scotts Miracle-Gro’s Returns
Returns Investors delay today’s consumption and invest so that they can have more tomorrow. While there are many investment vehicles to help achieve that purpose, investors are attracted to equities or stocks for the possibility of getting better returns. Within equity, the goal is to find the companies that can yield higher returns. In this […]
Scotts Miracle-Gro’s Sales Focus on Two Regions
SMG’s sales The majority of The Scotts Miracle-Gro Company’s (SMG) sales come from the US market. The company’s Scotts, Miracle-Gro, and Ortho brands command more than half of the market share in the United States. The company also claims that the brand awareness level of these three brands stands at over 80%. Let’s look at […]
Scotts Miracle-Gro’s Century-Old History
The history The Scotts Miracle-Gro Company (SMG) dates back to 1868. Conceived by Orlando McLean Scott, it aimed to give farmers weed-free and clean fields. In 1907, Scott’s son, Dwight, saw an opportunity in lawns playing a role in the American lifestyle. Therefore, the company started selling grass seeds, which replaced lower quality grass starters […]
Fertilizer Input: Natural Gas Rose for the Week Ended December 23
For the week ended December 23, 2016, average weekly natural gas prices at Henry Hub rose 1.0% to $3.52 per MMBtu compared to $3.45 the previous week.
AltaCorp Has Downgraded Agrium, but What’s the Consensus?
In this final part of the series, we’ll discuss analysts’ recommendations for Agrium and their price targets for Agrium and its peers over the next 12 months.
Do Analysts Expect Agrium’s Costs to Rise?
Gross margins for agricultural fertilizer companies such as Agrium, PotashCorp, Intrepid Potash, and Israel Chemicals have been under pressure recently.
What Do Analysts Recommend for Fertilizer Stocks?
PotashCorp (POT) and Agrium (AGU), which are both awaiting mergers, have a “hold” recommendation with a price target of $17 and $96.8 per share, respectively, over the next 12 months.
Natural Gas Prices Rose Last Week: Peril for Nitrogen Fertilizers?
For the week ending December 9, average weekly natural gas prices at Henry Hub rose 6.7% to $3.7 per MMBtu—compared to $3.4 per MMBtu the previous week.
12-Month Analyst Recommendations and Price Targets for Monsanto
Of the 19 analysts surveyed by Reuters, 11 of them have given Monsanto “strong buy” to “buy” recommendations. Seven have given it “hold” recommendations.
How Much Is Monsanto’s Revenue Expected to Rise in 2017?
For fiscal 2017, the Wall Street consensus estimate for Monsanto’s total sales is $13.9 billion. That would translate to a rise of 2.9% year-over-year.
SMG’s 12-Month Price Target and Analysts’ Recommendations
Of the ten analysts surveyed by Reuters, five have “strong buy” to “buy” recommendations, four have “hold” recommendations, and one has a “sell” recommendation on SMG.
Volatility Impacted Scotts Miracle-Gro in 4Q16
Scotts Miracle-Gro (SMG), a consumer lawn and garden products company, reported its fourth quarter and fiscal earnings last week.
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 […]
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.