Potash Corporation Of Saskatchewan Inc. (POT): Today's Featured Basic Materials Winner

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model

Potash Corporation of Saskatchewan ( POT) pushed the Basic Materials sector higher today making it today's featured basic materials winner. The sector as a whole closed the day up 0.9%. By the end of trading, Potash Corporation of Saskatchewan rose $1.21 (3.0%) to $40.84 on heavy volume. Throughout the day, 6,313,250 shares of Potash Corporation of Saskatchewan exchanged hands as compared to its average daily volume of 3,951,300 shares. The stock ranged in a price between $40.08-$41.05 after having opened the day at $40.10 as compared to the previous trading day's close of $39.63. Other companies within the Basic Materials sector that increased today were: Global Geophysical Services ( GGS), up 74.8%, GeoPetro Resources Company ( GPR), up 18.6%, Rubicon Minerals ( RBY), up 17.3% and Cliffs Natural Resources ( CLF), up 15.0%.
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Potash Corporation of Saskatchewan Inc., together with its subsidiaries, produces and sells fertilizers and related industrial and feed products primarily in the United States and Canada. The company mines and produces potash, which is used as fertilizer. Potash Corporation of Saskatchewan has a market cap of $33.6 billion and is part of the chemicals industry. The company has a P/E ratio of 16.4, below the S&P 500 P/E ratio of 17.7. Shares are down 2.6% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates Potash Corporation of Saskatchewan as a buy. The company's strengths can be seen in multiple areas, such as its expanding profit margins, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

On the negative front, Whiting USA Trust I ( WHX), down 23.0%, Carbo Ceramics ( CRR), down 17.4%, Noranda Aluminum ( NOR), down 9.7% and Patterson-UTI Energy ( PTEN), down 7.2% , were all laggards within the basic materials sector with Valero Energy Corporation ( VLO) being today's basic materials sector laggard.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the basic materials sector could consider Materials Select Sector SPDR ( XLB) while those bearish on the basic materials sector could consider ProShares Short Basic Materials Fd ( SBM).

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