Monday Promise: Robert Hsu’s Fertilizer

By Travis Johnson, Stock Gumshoe, July 28, 2008

Apologies for folks who are seeing this comment a second time, but the site had severe server problems yesterday and was down for much of the day — so I’m republishing it to make sure that you have a chance to read this note if you want to.

This is not going to be a fully fleshed out writeup, but I thought I’d take a moment on a lovely Sunday morning to share with you an ad that is being fairly aggressively distributed and that promises outsize returns early this week, based on an upcoming earnings announcement that is expected to offer the proverbial “blowout.”

The ad is from Robert Hsu and his Asia Edge service, and this is the promise:

“Is the Commodities Boom Over? Where to Profit Now…

“Buy before Monday For an almost-instant 15% gain!”

Hsu says that this fertilizer company will release earnings on Monday — tomorrow — and that you the earnings should be a spectacular blowout of expectations, and you’ll get a 15% pop in your shares.

The company, as you might have guessed, is Mosaic (MOS). To be fair to Mr. Hsu, this is one of the top two or three performing stocks that I’ve ever written about in this space, he has given his subscribers a great return — as well as anyone who bought the stock after seeing him tease it (and your friendly neighborhood Gumshoe write about it) over a year ago.

Does that mean they’re really going to post outsize earnings? I have no idea. Potash Corp, the closest comparison company, did release an upside earnings surprise last week, and the stock did go up — but do keep in mind that the expectations for these stocks are extraordinarily high, fertilizer remains many peoples’ favorite investment thesis, and everyone seems to believe that these stocks can do nothing but go up. I can’t prick that bubble, I just want to caution that even if he’s right, and even if Mosaic does extraordinarily well, it already got a boost from Potash Corp’s earnings release and it will have to be a really nice surprise — and an accomodating market environment that day — to see a big instant move in the stock price. This is, after all, a $50 billion company, a 15% move in a day is possible and has happened, but it takes some doing.

Great company, of course — just don’t know if they’ll go up 15% after the earnings come out. The earnings release will be after the market close on Monday, so it wouldn’t be surprising if there are some swings during the day if people hear rumors or have “feelings” about the earnings one way or thw other.

Mark Skousen is promising an earnings upside surprise on Tuesday, to go along with Hsu’s Monday promise here — I’ll see if I can get to that before the end of the day for you.


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