Thursday, September 5, 2013

Potash stocks

Supposedly Uralkali insiders dumped their stock holdings w/ the intent of pulling out of the potash cartel.  Since insider trading isn't illegal in Russia, as long as you party in the same places Putin does, and since it makes no sense for either party to break up a cartel long-term, I believe the analyst cited in the article more or less hits the nail on the head when he writes: “If the share prices of potash companies are plummeting, this makes it easier for Russians to take over Belarusian producers,” said Forbrig, a senior program officer at the US German Marshall Fund in Berlin, told Bloomberg. 

I'm not sure if the intent is to buyout a Belarusian producer, but you sure can buy back your shares at much cheaper, then make a fresh deal w/ the Belarusians.

Looking at the chart of Uralkali, you can plainly see that the stock sold off hard a week before the breakup of the cartel was announced, so I like that the price action confirms the story.  Now I'm just looking for evidence that insiders have/are buying back again at lower prices.  I got confirmation today w/ an upside breakout in Uralkali, so I'm buying up POT and IPI in hopes that a renewed deal is made soon.  I'm just playing the chart and I don't mean to risk more than below support areas in the stocks.