POTASH CORP. OF SASKATCHEWAN $44 - Toronto symbol POT

POTASH CORP. OF SASKATCHEWAN $44 (Toronto symbol POT; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 856.5 million; Market cap: $37.7 billion; Price-to-sales ratio: 4.2; Dividend yield: 0.6%; TSINetwork Rating: Average; www.potashcorp.com) is a leading producer of potash, phosphate and nitrogen for use in fertilizers. Most of the company’s mines are in Saskatchewan, which has the world’s largest potash deposits.

The company sold 2.2 million tonnes of potash in the three months ended September 30, 2011. That’s up 13.7% from 1.9 million tonnes a year earlier. The average potash price rose 47.4%, to $451 a tonne from $306 (all amounts expect share price and market cap in U.S. dollars).

As a result, Potash Corp.’s earnings jumped 140.8% in the quarter, to $826 million from $343 million. Earnings per share rose 147.4%, to $0.94 from $0.38, on fewer shares outstanding. Sales increased 47.4%, to $2.3 billion from $1.6 billion.

The stock jumped to $63 after Ottawa blocked BHP Billiton Ltd.’s (New York symbol BHP) hostile, $43.33 U.S.-a-share takeover offer in November 2010. However, it has moved down lately, partly because BHP and other big mining companies plan to build their own potash mines in the next few years. That would put pressure on potash prices.

The stock trades at 11.6 times the $3.75 U.S. a share that the company should earn in 2011.

Potash Corp. is a hold.

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