Cleaning out the stables
A bad quarter as far as the numbers go, but there's still hope for Yara International
Net income per share, for example, fell by a little more than 88% from the third quarter of 2008.
This was exactly the kind of kitchen-sink quarter I was looking for when I last updated this stock on Oct. 5. Included in the huge drop in net income per share, for example, were end-of-cycle items, such as a $26-million write down of potash inventories.
Companies tend to deliver these huge, clear-out-all-the-bad-news quarters because they can see the business cycle turning. I think that's the case for Yara International.
Delivery volumes rose 10% from the third quarter of 2008, and while potash prices are likely to fall about $60 or so per ton, prices for other kinds of fertilizer seem to have stabilized and in some cases -- nitrogen, for example -- are near a turn as demand has caught up with supply.
Yara International reported that global utilization rates in the nitrogen industry are within 1% to 3% of industry capacity. If that's accurate, it will take only a small increase in demand to push prices higher.
I'm still looking for a general recovery in the fertilizer industry in 2010 -- either by the turn of the year for potash or by the end of the first quarter for other fertilizers. (For more on the fertilizer industry see my update to Potash of Saskatchewan (POT), my other fertilizer Jubak's Pick )
Yara International hit my target price of $37 a share by September 2010 just a bit early -- in November 2009. As of November 16, 2009, I'm keeping the stock in Jubak's Picks and raising the target price to $47.20 a share by November 2010. (It traded at around $38 Monday.)
At the time of this writing, Jim Jubak owned shares of Yara International in his personal portfolio.
MORE ON MSN MONEY
Copyright © 2013 Microsoft. All rights reserved.
Quotes are real-time for NASDAQ, NYSE and AMEX. See delay times for other exchanges.
Fundamental company data and historical chart data provided by Thomson Reuters (click for restrictions). Real-time quotes provided by BATS Exchange. Real-time index quotes and delayed quotes supplied by Interactive Data Real-Time Services. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by SIX Financial Information.
When it comes to efficiency gains, a watt saved is a watt earned.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.