POT bought recently by George Soros, Buyback plan, & Recommended by Stockpickr
Here is an article from Stockpickr released late this morning. Stockpickr is a widely-publicized Internet news and screening service run by James Altucher, who also manages a "fund of hedge funds." Stockpickr's positive comments on POT are likely to get wide reading, and it is even more important that they show POT actually follows through on its share buyback programs. That speaks well of POT management, in contrast to corporations that announce buyback programs but never use even half of the buyback authority they receive.
Here is the excerpt from Stockpickr's article today. I added the brackets at beginning and end:
[[[Part of the philosophy of Stockpickr is to follow in the footsteps of smart people. This could mean a few different things. First, it could mean piggybacking great investors like Warren Buffett or George Soros. Other times it means buying what the CEOs, employees and directors of a company are buying. These are people who know the intimate details of their companies far better than you or me. The perfect setup is when one of these company insiders or an entire board (in the case of a stock buyback) are buying shares at the same time that some smart savvy investors are as well. ... For instance, Potash (POT) is in this week's portfolio. The world's largest fertilizer producer announced that it will double its repurchase amount to about 10% of its outstanding common stock. The company has already completed the buyback of 15.82 million shares, or 5% of its stock, the limit allowed under its current normal course issuer bid. However, the company will ask the Toronto Stock Exchange to allow it to repurchase an additional 15.68 million shares, worth $2.36 billion. The buybacks have an expiration date of Jan. 30, 2009.
"We currently have an opportunity to use our strong cash flow to re-invest in the world's best potash assets -- our own company -- at an attractive price," said Bill Doyle, PotashCorp president and CEO. "We believe our shares are significantly undervalued versus our long-term potential."
Potash reported very impressive second-quarter earnings on July 24. As increased world grain prices boosted demand for fertilizer, Potash's profit tripled to record levels. The Canadian company earned $905.1 million, or $2.82 a share, up 217% from $285.7 million, or 88 cents a share, in the year-ago period. Potash said its full-year outlook is robust seeing as demand for its fertilizer is still as strong as it was in July. In July, the company said it expects full-year earnings of $12 to $13, up from the April estimate of $9.50 to $10.50.
It's also good to see that Soleil Securities Group recently upgraded Potash from hold to buy based on attractive valuation. The shares have dropped 33% from their all-time high of $242 in the past nine weeks, and Mark Gulley from Soleil thinks investors should take advantage of the buying opportunity.
He commented: "Grain and fertilizer demand growth is doubling from 2% to 4%, driven by: growing middle classes in developing countries that desire more grain-intensive meat and dairy in their diets, and the dire need for higher crop yield to meet the challenges of decreasing arable land, high crop prices, and low grain inventories."
The D. E. Shaw Group is a noteworthy global investment firm that's buying Potash stock. Since its organization in 1988, the $50 billion firm has earned an international reputation for financial innovation and an extraordinarily distinguished staff. Its other top stock picks are Exxon (XOM) and Pfizer (PFE).
We also like to see that George Soros, the founder of the Quantum Fund and one of the most successful hedge fund investors ever, is betting on Potash.]]]