-
Itafos Inc. (IFOS $3.63)
-
Nutrien Ltd. (NTR $101.43)
-
Gensource Potash Corporation (GSP $0.17)
-
Replenish Nutrients Holdings Corp Com (ERTH $0.14)
Q: The Iran war has raised concerns about potash supply. While NTR has received positive reviews, how about companies like GSP and ERTH? They are basically penny stocks and have done well. Can that continue?
Also IFOS has done well, has a larger market cap than NTR and yet (according to RBC) has a PE of 4,7.
For an investor wanting to tap into the potash potential what would you recommend as the best course of action.
Thank you.
Also IFOS has done well, has a larger market cap than NTR and yet (according to RBC) has a PE of 4,7.
For an investor wanting to tap into the potash potential what would you recommend as the best course of action.
Thank you.
5i Research Answer:
We would be very cautious on the tiny, non-producers. They will not ge the benefit of war-induced higher prices. ERTH is really too small to recommend. GSP is larger, but should still be considered highly speculative. It is still working on design studies and no production timeline has been publicly disclosed. IFOS is very cheap. It has cash, cash flow, earnings and $500M in sales. Market cap is $814M (not larger than NTR) and stock momentum is excellent. Insiders own 2% and CL Fertilizers owns 67% and thus this makes the stock extra volatile. But it is interesting for a small cap, certainly. NTR we think is the safest bet in the sector, still at 16x earnings, with a nice dividend and a much higher level of safety than the others here.