POTASH CORP. OF SASKATCHEWAN $41 (Toronto symbol POT; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 864.9 million; Market cap: $35.5 billion; Price-to-sales ratio: 4.3; Dividend yield: 2.8%; TSINetwork Rating: Average; www.potashcorp.com) aims to raise its stake in Israel Chemicals Inc. from 13.9% to at least 51%.
Israel Chemicals produces potash from minerals it extracts from the Dead Sea. Based on Israel Chemicals’ current stock price, this purchase would cost Potash Corp. around $6 billion U.S.
The Israeli government considers this a strategic resource, so Potash Corp. needs permission to buy more shares. Still, this investment would give it a greater stake in a high-quality potash deposit.
Potash Corp. is a buy.