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LDVIC 1.87% vs S&P500 9.81% (Change -7.95%)
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LDVIC 1.87% vs FundSmith 7.46%
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LDVIC 1.87% vs Berkshire 14.34%
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Intrepid Potash (IPI); market cap $250m
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Intrepid Potash $250m market cap
It is a mining company which sells potash Potash is a fertilizer used in agriculture It is also used in oil and gas drilling It is used as animal feed.
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Intrepid Potash - It supplies 9.1% of annual U.S. potassium consumption - 1.5% of world potassium consumption - As a US based producer of potash it benefits lower total production tax and royalty burden
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Intrepid Potash It has two main potash products Potash (the commodity)
Trio (premium potash which includes sulphate)
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IPI: MCAP: $250m Share: ~$1.90 Net debt: ~$80m EV: ~$330m
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Risks? Price of potash (over supply) INTENSE competition
Weather patterns for famers Farmers don’t want to spend too much on fertilizers Oil and gas prices Increasing labour costs High Operational Leverage Debt
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Advantages/positives
- Deferred Tax assets of +$300m - PPE of at least $300m (Minerals and machinery) - After all the debt and pensions it has at least $300m in equity
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Intrepid Potash It has two main potash products
Potash (the commodity) ~75% sales Trio (premium potash which includes sulphate) 25% sales Trio has fantastic pricing power.
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Management’s comments from 10q:
… We expect potash prices will remain firm through the first half of 2017 … domestic Trio pricing stabilized in the fourth quarter and into the first part of 2017 ... we expect our potash production to increase in 2017 compared to 2016.
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Competitors’ earnings calls
Mosaic We are optimistic about And we are definitely feeling better now than we were at this point last year. There is no question that business conditions are improving we are confident that the bottom of the cycle is behind us, and that markets are improving, albeit slowly. we continue to expect strong global demand in 2017. And, importantly, we have seen meaningful reductions in global capacity and production in potash Potash Corp. we believe this is the first year in more than a decade where the potash industry has had a drawdown in global inventory at both the producer and distributor levels.
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Insider Salary
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Insider Share purchases
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Who owns the stock?
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5yr average of $1B mcap vs now $250m
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Who owns else the stock?
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Fair Value: +$400m market cap? 50% upside?
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LDVIC 1.87% vs S&P500 9.81% (Change -7.95%)
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