Analyst's Toolkit is a weekly feature that assesses stocks, bonds and funds by using measures that can give different perspectives on valuation. Come back every Wednesday for fresh insights into analyzing securities.
The companies offered exposure to a market that would certainly factor into the ongoing global expansion. Fertilizer producers' growth was projected to go into orbit as the world figured out a way to produce enough food to feed emerging super powers such as China and India.
While growth petered out during the economic contraction of the past year, these companies still appear to be well-positioned to profit from globalization. Potash and Mosaic are beating the S&P 500 this year. Potash has climbed 32%, while Mosaic is up 54%, versus the S&P 500's increase of only 13%.Deciding between those investments can pose a more difficult decision for investors than simply whether the industry looks attractive in the current economic climate. Both Mosaic and Potash have appealing metrics underpinning them. However, when looking at the complete picture, one is a clear favorite. Beta Potash: 1.18; Mosaic: 1.37. Both Potash and Mosaic offer betas of greater than 1, suggesting the stocks will be more volatile than the market as a whole. While this could be troubling for investors seeking a low-risk portfolio to protect capital, investors who desire greater growth opportunities should be interested by these numbers. During these times of great economic uncertainty, many investments have beta values well in excess of 2. These relatively modest figures promise that both investments should offer controlled movement.
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