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When to Buy on Bad News
The old Wall Street adage says to “buy on bad news, sell on good news.”
This simple strategy paid off well for decades.
The cycle was simple. A large-cap company would have one or two bad quarters. Expectations for future quarters would fall. The herd would run away. Once expectations were low enough, the company would be able to beat them. The herd would come piling back in and run up shares. Expectations would rise and the whole cycle started all over again.
It was a near clockwork cycle for most companies and a very profitable one for investors who bought…
27Jul2009 | Q1 Publishing | 1 comment | ContinuedThe Good and Bad of Fertilizer Stocks
It seems like it’s been years since CNN Money opined, “Who needs Google and Apple? Agriculture companies are the new ‘it’ stocks.” But it was just six months ago.
Since then agriculture stocks turned shooting stars to exploding supernovas. Leading the way down has been fertilizer stocks. Shares of former Wall Street and momentum chasing hedge fund darlings Potash Corp (POT:NYSE), Mosaic (MOS:NYSE), CF Industries (NYSE:CF), and Agrium (AGU:NYSE) have led the way down. And practically all of them have cut their production for 2009.
The sell-off has come from deleveraging hedge funds, mutual funds selling to meet redemptions, and the market realizing not…
6Jan2009 | Q1 Publishing | 0 comments | ContinuedGood News for Some Long-Term Potash Investors
By Andrew Mickey, Q1 Publishing
It’s been a wild year for fertilizer stocks. Many investors who have been loading up on agriculture stocks right along with the hedge and mutual funds have taken some big lumps over the past couple of months, but it looks like the panic selling period is behind us.
When overleveraged traders and hedge funds are forced to sell anything and everything, we’re all forced to relearn that fundamentals mean next to nothing in a bear market. But that could be slowly starting to change right now. And if it does, the long-term outlook for fertilizer and potash…
Potash blows out earnings
Here are some interesting quotes from the conference call:
Bill Doyle: Despite the turbulence around us, our company delivered the best quarter in our history. Our earnings of $3.93 per share were 39% higher then the record we set in the second quarter this year and greater then the $3.40 per share earned in all of 2007 which was a record year for our company.
We generated $1.7 billion in gross margin, more then triple last year’s third quarter. This included record gross margin in all three nutrients as we captured the benefits of a strong pricing environment. Our cash flow from operating…
24Oct2008 | The Real Deal | Comments Off | ContinuedGlobal Investing Roundups
Southwest Feels the Love; Minimum Wage Bump; Qualcomm and Nokia Accord; Fertilizer Firm Reaps Rewards; Unemployment Claims Mount; Ford’s Worst Quarter in History; Dow Unable to Recoup Losses; Gaming Taking Off in Macau
Southwest Airlines Co. (LUV) yesterday (Thursday) announced that second-quarter revenue increased 15% due to the advance purchase of fuel contracts, Bloomberg News reported. Second quarter earnings increased to $321 million or 44 cents per share for the Dallas-based air carrier. Even without the boost from fuel hedging, Southwest would have earned $121 million or 16 cents per share, beating analyst expectations.
The national minimum wage in the United States increased yesterday…
25Jul2008 | Money Morning | Comments Off | ContinuedAgriculture Supercycle Fertilizes Investor Profits
In a choppy market swirling with negative energy, wouldn’t it be nice to own a resource stock that keeps rising in the face of ALL bad news?
Welcome to the “agriculture super cycle†and the wild and whacky world of fertilizer.
To give you an idea how bullish the fertilizer industry is – since Jan 1, 2008 – while the S&P TSX composite index has decreased 4%, major fertilizer companies like Agrium [TSX:AGU], Mosaic [NYSE:MOS], Potash Corp [TSX:POT] and Kennecott [NYSE:RTP] have gained an average of 21%.
What are the fundamentals that go into creating this so called “super cycle�
Potash and phosphate fertilizer are mined…
14Mar2008 | Guy Bennett | Comments Off | Continued
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