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ITT Educational Services Inc. Message Board

tommyleesd2003 5 posts  |  Last Activity: Apr 10, 2014 3:36 PM Member since: Dec 29, 2008
  • Reply to

    New POT President and CEO Comes Aboard July 1st

    by abbaman7 Apr 6, 2014 8:57 PM
    tommyleesd2003 tommyleesd2003 Apr 10, 2014 3:36 PM Flag

    I don't think you can necessarily fault Doyle for the poor stock performance in recent years. If you look at the company's average P/E over the last 10 years, Doyle is leaving with the valuation of the company materially above its historical average. Potash Corp. of Sask. is a great steward of capital and a very well-run company. The stock has performed poorly due to macro conditions that are primarily beyond their control.

    I thought Delaney would be next in line. I was surprised about Jochen Tilk. I couldn't help but notice the last line in PCS' press release where Tilk said he "looks forward to moving to Saskatoon". I know this was an issue with Doyle, with his primary residence being a Northern Suburb of Chicago. Given Saskatchewan's support for PCS by blocking the BHP acquisition, I wonder how important it was to have someone willing to move to Saskatoon? I have to believe its difficult recruiting top executives to Saskatoon, and it was probably a requirement. I am pretty sure Doyle wasn't very popular with Saskatchewanians after the layoff announcement late last year right before Christmas, but I think he did a very good job running the company. I really enjoyed listening to him on CC's and investor presentations.

  • Reply to

    Interesting Development Regarding SQM

    by abbaman7 Mar 5, 2014 8:50 AM
    tommyleesd2003 tommyleesd2003 Mar 5, 2014 12:10 PM Flag

    While SQM’s potash business is only ¼ of the company’s gross profit, SQM’s iodine and specialty plant nutrition businesses fit the profile of the inelastic demand curves (POT has always touted this with potash) and resource scarcity. Iodine is basically only produced in two countries (Chile and Japan), so that’s right up PCS’s alley. Lithium is also a limited resource across the world.

    SQM has always scared me a little in terms of it’s high valuation, but I went back and it’s averaged between 13x and 14x EV/EBITDA over the last decade. It’s below that historical trading range now. The stock is down around 45% over the last two years. Instead of buying back stock, perhaps it’s time to pull the trigger on this one. The ownership structure of SQM is a little confusing when you look at it. I don’t know if there are hidden liabilities there or what other things that may complicate an acquisition, but if ICL isn’t for sale, SQM is the next logical target.

  • tommyleesd2003 tommyleesd2003 Mar 3, 2014 1:32 PM Flag

    abbaman, you are the man. Very pertinent information.

    I don't see an impact in regard to China. The Chinese buy oil from countries that do far worse things than Russia (Sudan)

  • tommyleesd2003 tommyleesd2003 Feb 24, 2014 3:05 PM Flag

    The thing people don't seem to notice (outside of you, abbaman) is that POT and MOS trade at more expensive multiples on forward earnings (P/E, EV/EBITDA) than they did before Uralkali's announcement in July 2013. I read things where people are saying these potash producers are cheap, but their valuations are rich by historical values.

    I think Potash Corp's valuation is supported by its dividend yield (4.0% to 4.5%). Even more importantly, when your project their cash flows, as their capex plans ramp down, Potash Corp. will actually be able to fund the dividend payments through internally generated cash flow (with some share repurchase, too), which I think is why the valuation is relatively high.

    Potash Corp. is the low-cost producer in North America and can support strong shareholder rewards when pricing is at low levels. I think the share repurchases are not a good use of cash, however, as I'd prefer them acquire more potash capacity during this period (not build it). This company was ready to buy ICL a few quarters ago; why not consider an investment in Belaruskali? PCS has the balance sheet strength to do it.

  • tommyleesd2003 by tommyleesd2003 Feb 17, 2014 12:09 PM Flag

    The two most important potash producing countries in the world (Canada and Russia) also happen to be great hockey countries, and have the two favorites in men's Olympic hockey (Canada and Russia I believe were both close to having 2/1 odds of winning the gold medal)

    Under normal circumstances, Canada vs. Russia wouldn't be that big of a deal but given the actions of Uralkali this summer and the reaction of Bill Doyle calling it "stupid" and "amateurish", to put it mildly there is some disagreement between Canpotex (CanadaPotashExporters) and Uralkali (Russia) right now.

    Who wouldn't love to see Canada vs. Russia in the Gold medal game in Olympic hockey this Sunday? I bet the guys at PCS in Saskatoon would LOVE to see Canada beat Russia at their own place.

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