For solid stock gains, consider Potash, Mosaic, and Agrium

By Money Matters Editors

Fertilizer plays are ‘in,’ and that’s no bull.

Money Matters is Reiterating its Buy rating for Potash (POT), Mosaic (MOS), and Agrium (AGU).

All three will perform well in 2010 and 2011 as the U.S. and global economic expansions strengthen.

Of the three, Potash will likely perform the best, from a total, average annual return on equity standpoint.

Potash has the economies of scale and distribution network to take full advantage of rising demand for fertilizer in emerging markets. But really, all three warrant investor consideration: as middle classes in developing markets expand, they’ll eat richer foods - such as more red meat and chicken – and consumption per person will increase, as well. That places upward demand on food, which requires more fertilizer. It’s a long-term, secular trend that’s only been temporarily interrupted by the global recession.

Look for POT to trade above $180 in 2010; Mosaic and Agrium above $90 in 2010.


--

Disclosure: Money Matters Editors and staff do not own shares in companies they review.