Potash Corp. (POT) has leverage in higher fertilizer application rates, higher crop plantings, increasing demand for biofuels and rising crop prices. The company is located in low cost areas and its financials are solid. Hence, we rate the stock a Buy with a target price of $250. This is 18.9x our 2008 estimate.

Potash Corporation enjoys significant cost advantage with regard to raw materials. All potash produced by the company in Saskatchewan is in the area, where extensive potash deposits are found. Moreover, the company has lower cost nitrogen operations in Trinidad due to the long-term, lower-cost gas contracts with Natural Gas Company of Trinidad and Tobago Limited as well as a proximity to the U.S. market.

In response to the rising prices of potash products, the company has engaged in the expansion and development of projects that will raise annual operational capacity to capture a significant share of the growth

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We've discussed recently the hot new place for natural gas is the potentially enormous Haynesville Shale [Jul 2: Petrohawk Energy and Chesapeake Energy Flying on Haynesville Shale News] (EDIT: Let me add 2 additional names) I've been hoping one of the 4 names closely associated with this space, either Petrohawk Energy (HK), Goodrich Petroleum (GDP), GMX Resources (GMXR), and Comstock Resources (CRK) would sell down to their 50 day moving average now that natural gas has finally been hit. But no mas as the charts below show. Things are going so well, that Goodrich actually placed a 3M share offering at $64 today and the stock is ...