Prem Watsa (Trades, Portfolio) disclosed on Thursday that he had trimmed 12.56% of its position in Intrepid Potash Inc. (IPI, Financial) according to GuruFocus real-time picks.
Trade details
The CEO of Fairfax Financial Holdings Ltd. (TSX:FFH, Financial) sold 2,093,005 shares for $4.45 per share. Watsa is gaining approximately 124% on the stock according to GuruFocus estimates.
Company background
Intrepid Potash produces and sells potash an potash byproducts to agricultural companies as fertilizer inputs. CEO Bob Jornayvaz said first-quarter results, led by “strong operational execution” and strategic strengthening of the business, contributed to a solid start to the year. During the quarter, the company reported net income of $1.8 million, or 1 cent per share , compared to a net loss of $13.678 million, or 17 cents per share in the prior-year quarter. Lower potash costs of good sold and increased water sales contributed to the increase in year-over-year net income.
Although Jornayvaz expects higher water sales in the second quarter, Intrepid Potash has a modest profitability rank of 5 primarily due to margins and returns underperforming over 88% of global agricultural inputs companies. Intrepid’s operating margin of -3.73% is below the historical 10-year median of 16.95% while the company’s return on capital based on Joel Greenblatt (Trades, Portfolio)’s definition is about 14% below the historical median of 13.99%.
GuruFocus lists one severe warning sign for Intrepid: the company’s revenue has declined approximately 23.10% per year over the past five years. Intrepid’s three-year revenue growth rate of -36.90% underperforms 96% of global competitors.
See also
Premium members can view portfolio information on over 150 gurus, including real-time trades.
Disclosure: no positions
