Why Intrepid Potash Stock Jumped 10% on Monday
Shares of fertilizer producer Intrepid Potash (NYSE: IPI) stock closed 10% higher on Monday.
I rather doubt that Intrepid Potash itself had much to do with its stock's move, however. Although the company informed investors last week that it will be releasing Q2 earnings soon (on Aug. 2), that fact alone doesn't seem like the kind of thing that could spark a move like the one we saw today.
Rather, the defining event that appears to have catalyzed Intrepid Potash's move was an upgrade for another potash stock -- PotashCorp (NYSE: POT) to be precise. Just before 10 a.m. this morning, StreetInsider.com reported that analysts at Scotiabank had upgraded shares of PotashCorp to "sector outperform" (i.e., "buy") and assigned the stock a price target of $20 a share -- 23% higher than where shares were trading before the upgrade.
That news sent PotashCorp stock up 5.2% and appears to be the reason Intrepid Potash shares, too, began climbing higher around 10:30 a.m. this morning.
Should you chase these shares higher? In a word: no.
For one thing, the upgrade that sparked this morning's rally didn't concern Intrepid Potash at all, but PotashCorp instead. For another, there aren't even any publicly available details on why Scotiabank liked PotashCorp -- and thus no assurance that whatever has the banker enthusiastic about one fertilizer producer is applicable to an entirely different fertilizer producer.
And given the differences between the two stocks -- notably, the fact that PotashCorp is profitable while Intrepid Potash is not -- I'd say that if you feel compelled to buy any potash stock at all now, you're probably better off buying the one that won the upgrade, and not the one that didn't.
10 stocks we like better than PotashCorpWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and PotashCorp wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of July 6, 2017
Rich Smith has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.