Potash Corp (POT)

November 7, 2008

About

Potash Corporation of Saskatchewan Inc. is an integrated fertilizer and related industrial and feed products company. The Company's potash is produced from six mines in Saskatchewan and one mine in New Brunswick. Of these mines, it owns and operates five in Saskatchewan and the one in New Brunswick. Its nitrogen operations involve the production of nitrogen fertilizers and nitrogen feed and industrial products, including ammonia, urea, nitrogen solutions, ammonium nitrate and nitric acid. It has nitrogen facilities in Georgia, Louisiana, Ohio and Trinidad.

According to reports Potash is the world's largest and lowest-cost publicly traded potash producer, the fastest-growing segment in the fertilizer business. Its potash reserves are sufficient for more than 100 years of production. Current phosphate reserves should last more than 50 years.

The company's low-cost production achievement is an important asset as potash is the highest margin nutrient, and its production process has historically created higher barriers to entry for potential competitors.

Strong Cash Flow

Potash Corp has historically been a strong cash flow-generating company that used its cash to consolidate its position through outright acquisitions and by taking substantial stakes in other companies around the world. As a result, Potash Corp owns 21% of Sinofert Holdings, 10% in Israel Chemicals, 28% of the Jordan-based Arab Potash Company (APC), 32% of Chile-based SQM.

Potash Corp is also part owner of Canpotex--a distribution company and the world's largest exporter of potash.

Earnings

Here are the recent EPS numbers -

Earnings	Actual	Analyst Estimates	Difference
Q3 2008 on 10/23/2008	$1.74	$1.50	$0.24
Q2 2008 on 7/24/2008	$2.82	$2.60	$0.22
Q1 2008 on 4/24/2008	$3.37	$3.93	$0.56

The company said 2008 full-year profits will likely be around $12 per share, plus or minus 2 percent, down from its previous forecast of $12 to $13 a share.

Demand should rebound in four to six months with spring plantings. With the demand for food grains continuously growing in India and China, the demand is also expected to grow in that segment.

Given the strong demand, good earnings, a P/E of less than 10 and importantly a strong cash flow, this certainly is a stock on my watch list.