“If you don’t have a competitive advantage, don’t compete
Por si esto no fuera suficiente indicio, resulta que Sinofert está participada por Potash en un 22%, y si queda algún escéptico, añadiremos que Potash tiene 2 de los 8 asientos en el “board of directors” de Sinofert. Los oligopolios, la colusión de precios, los cárteles etc. tienen mala prensa, hay regulaciones anti-oligopolios, pero como dice el hijo de Phil Fisher, Kenneth Fisher, gestor multibillonario en su libro “Super Stocks”, refiriéndose a las características de las super-empresas,
All I want in life is an unfair advantage
A pesar de las referencias a la calidad de su producción y su nivel de servicio, Potash milita en el sector commodities, y en este ámbito hay que tener algo más que un nombre molón ya que la entrada de cualquier competidor más fuerte –o más irracional- conlleva un descenso de los márgenes y todos podemos imaginarnos qué clase de final le espera a las empresas cuyos márgenes dependen de un entorno macro favorable a sus intereses.
Un punto a su favor reside en las fuertes barreras de entrada que debería asumir un nuevo competidor, el potash es un mineral relativamente abundante pero su extracción implica un enorme coste de capital, aproximadamente unos 3000 cad / tonelada (para un coste total incluyendo infraestructura para el transporte entre 4.7-6.3 billones de CAD) vs 1000 cad / tonelada para los proyectos de expansión de Potash Corp, y un lead time desde el inicio del “greenfield” hasta su explotación comercial de unos 7 años.
A nadie le importa si las latas de Coca Cola vienen en un envase fabricado por Alcoa.
Retornos de Capital
Una medida de la capacidad de creación de valor nos la da las diferentes formulaciones de retornos de capital, personalmente me gusta el ROIC de Joel Greenblatt ya que tiene en cuenta el capital que realmente está “atado” en el proceso productivo de la empresa y no queda distorsionado por la deuda de la misma.Añadiremos también las medidas de ROE para tener otra referencia de retorno.
EBIT / (Receivables + Inventory + Other Current Assets + PPE) - (Payables + Other Current Liabilities)
ROIC 2011 = 4306 / (1195+731+52+9922)-(1295+67)=40,86%
ROIC 2012 = 3019 / (1089+762+344+11505)-(1188+51) = 24,22%
ROE = net income / equity
ROE 2011 = 3081 / 7847 = 39%
ROE 2012 = 2079 / 9912 = 21%
En el siguiente post, haremos una valoración o intento de la misma para determinar algo parecido al valor intrínseco de este gigante de los fertilizantes / Slds / Cesc "Nowitzki 71" / Edito: LARGO Potash Corp
Potash Oligopoly Breaking Down?
Russian potash miner Uralkali--one of the largest and lowest-cost potash producers in the world--announced today that it will no longer direct its export sales through the Belarusian Potash Company (BPC), one of two cartel-like organizations that control the majority of global potash supply. Uralkali accused Belaruskali, its partner in the BPC, of making potash deliveries outside of the cartel. The breakup of the eastern European cartel has major implications for the global potash market, since cooperation between producers is the primary reason potash prices have been sustained at levels well above the marginal cost of production. This announcement could set off a race to the bottom, with major suppliers sacrificing pricing in pursuit of volume. Uralkali's CEO is quoted as saying the company will aggressively increase its production volumes, and that global potash prices are likely to fall more than 25% from current levels. Unfortunately, potash is one of the commodities we are most exposed to in the Hare. Potash Corporation of Saskatchewan POT and Compass Minerals CMP are both down around 20%-24% as of this writing. Uralkali seems to be shooting itself in the foot with this decision as well, with its own shares down 17% in London.
We may need to put our finance textbooks aside and instead take out our game theory textbooks for this one. Maintaining an oligopoly takes tremendous discipline on the part of all companies involved. The potash oligopoly has enabled prices to remain well above the marginal cost of production, which our analyst estimates at around $250 per ton (versus our previous long-run price forecast of $375 per ton). This means that anyone who "cheats" by selling outside of the cartel potentially stands to make a lot of money--as long as its partners don't find out.
Uralkali's CEO issued the following statement:
Unfortunately, we should state that our cooperation with our Belarusian partners within BPC framework has come to a deadlock. It has always been Uralkali's position that export activities of both producers should go through the unified sales network. This fundamental principle of partnership was violated by the Decree No.566 issued by the Belarusian President on 22 December 2012, which cancelled the exclusive right of BPC to export Belarusian potash. Following the issue of the Decree, Belaruskali has made a number of deliveries outside BPC.
We have repeatedly informed our Belarusian partners that such actions were unacceptable and they have ultimately destroyed the fundamentals of our prolonged fruitful cooperation. In this situation we have to re-direct our export deliveries through our own trader.
Still, we thank our Belarusian partners for cooperation within the BPC framework and do not exclude the possibility of cooperation on a mutually beneficial basis in future.
There are basically two ways we can interpret this. The worst case scenario would be that cooperation between potash producers is over, prices will converge toward marginal costs, and PotashCorp's wide economic moat is a thing of the past (Compass Minerals' wide moat could also be at risk, though the moat is less dependent on potash given Compass' low-cost salt mining operation). Our fair value estimates for both companies are now under review, but our analysts had previously indicated that PotashCorp and Compass Minerals could be worth around $25 and $68 per share, respectively, in a bear case.
The alternative interpretation is that Uralkali is merely taking a very aggressive bargaining position against Belaruskali in order to force it to comply with BPC's export rules. Belaruskali may have believed that it could get away with its "cheating" on the cartel because Uralkali would be unwilling to sacrifice its own business to bring Belaruskali in line. The last sentence of Uralkali's CEO's statement above would seem to leave open the possibility of reconciliation. In this case, rational pricing in the potash market could be restored in the not too distant future. In the meantime, the deterioration in the outlook for potash is very likely to result in cancellations of potash development projects, such as BHP Billiton's BHP proposed Jansen mine. If this is the case, the oligopoly could perhaps emerge from the other side of this tumultuous period stronger than ever.
I've never liked speculating on commodity prices, and this is the clearest example yet as to why. The Tortoise and Hare generally have not done well with stocks where commodity prices were the primary driver of the investment thesis; I would include Exelon EXC and Cloud Peak CLD in this group. In my view, it is simply too hard to gain an edge in predicting the direction of commodity prices. I violated my own rule about this when I added one percentage point to our PotashCorp position back in January, and it hasn't taken long for me to regret that decision. I will be extremely cautious with any similar situations in the future.
That said, I do not plan to sell either PotashCorp or Compass Minerals in the near term. First, I will wait to see what our analysts' new fair value estimates are, as well as whether there is any impact on our economic moat ratings. Also, I want to give Uralkali and Belaruskali a little time to work out their differences. It is in neither company's interest to let this feud persist, and I am hoping that rationality may return now that Uralkali has put all its chips on the table.