www.bethelfinance.com
Israel Chemicals Ltd. advanced to the highest in three months on investor speculation shares of the company that extracts minerals from the Dead Sea to make fertilizer and potash are undervalued.
The Tel Aviv-based company’s stock rose 4 percent to 42.41 shekels, the highest level since Nov. 13, at the 4.30 p.m. close in Tel Aviv. The stock is valued at 9.4 times estimated earnings compared with 12.5 times for Canadian fertilizer producer Potash Corp. of Saskatchewan Inc.
“The stock is undervalued and has underperformed compared to peers,” said Guil Bashan, an analyst at I.B.I.-Israel Brokerage & Investments Ltd. in Tel Aviv. “It’s in a position to present a strong profit and higher dividend yields for investors as it isn’t as dependent on fertilizers” as other companies, he said.
Mosaic Co., the largest U.S. potash producer, and Potash Corp. have reduced output as farmers and distributors put off purchases in anticipation of lower prices. Farmers apply potash, a form of potassium, to their fields to help strengthen plant root systems and make their crops more resistant to drought. Israel Chemicals got 34 percent of 2010 revenue from potash and 23 percent from industrial products, according to data compiled by Bloomberg. Potash derived 46 percent of 2010 revenue from potash and 28 percent from phosphate, another fertilizer.
Israel Chemicals has gained 7.4 percent this year, while Potash Corp. is up 13 percent. Mosaic, which is trading at 11.5 times estimated earnings, has gained 13 percent this year.
No comments:
Post a Comment