Verde Agritech (NPK.TO), mcap=C$467m, price C$8.99 vs C$6.93

– Brazilian producer of potash listed in Canada.
– Expanding rapidly – from 100K tons in 2020 to 1M toms in 2022 -due to product superiority.
– Profitable, low CAPEX needs.
– Trades at 8x 2022 PE using a 50% discount on current potash prices.
– Production capacity 35% higher than 2022 guidance.
– Managed by an intelligent fanatic.
– Jurisdiction and peak potash pricing risks.

Valuation: Assuming potash prices of $500 (less than half of the current), Verde is trading at 7.9x 2022 earnings and 4x 2023 earnings, and the blue-sky scenario with plant 3 could be trading at even 1x 2024 p/e.

Exp. gain: Not specified.

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