Comments on Fund My Mutual Fund: Intrepid Potash (IPI) Solid Quarter - Future Looks...

Thank you guys, that is extremely bullish. I was ...

2008-06-02T13:46:00.000-04:00

Thank you guys, that is extremely bullish. I was worried they were under 6 month or 12 month type of contracts. A 3 month lag is nothing.

If you want to see historical, just click on the label tag for Mosaic, or Potash - its been basically straight up.

I listened to the call and got the same info as Ja...

2008-06-02T13:38:00.000-04:00

I listened to the call and got the same info as James. They repeated it several times in fact...there is a lag of about 3-4 months between the contract price and the spot price for that particular quarter.

Essentially they lock-in contracts for the quarter ahead by 3 months. So in this latest Q, they said they locked-in their contracts prices in September 2007 for shipments to customers to be made during the January - March (Q1) period. Going by this time-frame, their recognized contract price on that 70% should reflect Potash prices as they were in December-January. I havent been able to find specific historical pricing info on Potash, any ideas?

Hi James,Where did you get that info? Even if the...

2008-06-02T13:20:00.000-04:00

Hi James,

Where did you get that info? Even if the 70% if fixed but they price it at the beginning of the quarter that would be very bullish. Source?

If I understood correctly, they have a 3 month lag...

2008-06-02T13:12:00.000-04:00

If I understood correctly, they have a 3 month lag between the price they get and the market price. At the beginning of a quarter they fix the price for 70% of the production and sell the remaining 30% on the spot market. This policy will not change in the future (same spot exposure looking forward). For me that means that there is indeed some potential here.

Even if they have contracted, it will roll off. T...

2008-06-02T13:09:00.000-04:00

Even if they have contracted, it will roll off. The valuation was awfully expensive when it IPO'ed. I cant remember exactly what it was, but I remember thinking - wow.. that's rich! I'll look into the quarter.. what I'm hoping to see, is that they actually did contract at the lower price, and that the stock does in fact reflect that. So it should get the boost from rolling off. But somehow, I think the stock has already priced in the full extent of future production at high prices. (at least, without looking at the numbers - just a hunch - because of the huge premium)

The problem is, it should of traded around mid $30...

2008-06-02T11:40:00.000-04:00

The problem is, it should of traded around mid $30s after IPO but since it came public during the heights of the fertilizer craze it was hyped up to $50

Its a rich valuation but right now without more data on its future quarters - i.e. how much of their future production is already locked in versus open to market pricing its hard for me to tell. Thats the reason I have held off buying at this point - I will listen to the conference call tonight and see if they give better guidance on what they expect for average selling price. If its something in the $400s/$500s in Q3-Q4 etc - there should be lots of upside. If they already contracted a lot at $200s/$300s then not as much.

With the information I have it is impossible for me to tell the upside to earnings.

That looks good. Any idea if the stock is currentl...

2008-06-02T11:38:00.000-04:00

That looks good. Any idea if the stock is currently overvalued? I ask that because I see that the stock hasn't gapped up after what seems to be a good news. What am I missing?