One stock for emerging market portfolios in 2012 (POT)

Traders will be asking themselves where to invest in 2012 over the coming days. One approach that seems to help is to look not only at what my family needs are but what the world’s growing population needs now and in the future.

When boiling down the list we come to the conclusion that 2012’s population is going to need more food, more fuel — both green and traditional — and more bandwidth.

More people will embrace broadband data as society embraces more electronic devices and the cloud of play. At the same time, as emerging markets populations join the global middle class, the demand for high-protein food will follow suit. And more cars will put additional pressure on the energy sector.

Predicting which stock in any of these sectors will bring riches to your portfolio is like predicting the path of hurricanes here in Florida. You have basic idea of when and where the storm will hit but there is no guarantee. 

The same holds true for stock forecasting, but traders can make well informed educated decisions based on what we already know about 2012.   

With that in mind, we set our screens to look for stocks that fit the bill.

Potash Corporation (POT, quote) is trading currently around $46 with an estimated 2012 earnings of $3.9 billion and a P/E of 10 based on those earnings.

Over the last decade, the average P/E on POT has been 34, so this stock looks remarkably cheap on a historical basis.


Experts predict the world’s population is expected grow more than 44% through the year 2100. 

This would result in more 3 billion additional people to feed. 

These dynamics work out well for POT, the world’s largest supplier of potassium compounds commonly called potash — a key component in high-grade fertilizers — and a long-term favorite at

Based in Saskatchewan, POT enjoys a strong competitive edge and a high “moat” surrounding its business. While start-up potash producers are fairly plentiful, few have appreciable scale or the ability to mine their deposits efficiently.

Potash is only produced in 12 countries and it costs around $4 billion to build and start a mine.

Stay tuned as we explore which companies are poised to benefit from 2012’s growing population.

Happy New Year to all Emerging Money readers.

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