A sinkhole almost the size of a soccer field near PAO Uralkali’s potash mine in Siberia isn’t scaring away Societe Generale SA or BCS Financial Group. They say the stock is a buy as it trades at half the valuation of its biggest peer and as the company is set to raise prices with Asian customers.
Uralkali, the world’s biggest potash producer by volume, trades at 8.7 times estimated earnings, compared with 17.4 for Potash Corp. of Saskatchewan Inc., the second-biggest supplier, data compiled by Bloomberg show. Uralkali will probably raise prices when it signs new deals with India and China this year, SocGen and BCS say. That may be enough to offset the likelihood that a mine representing almost 18 percent of total capacity will be lost, forcing a writedown of as much as $1 billion.
