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Intrepid Potash, Inc.

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The fertilizer stocks have attractive valuations. Intrepid Potash, Inc. (IPI - Free Report) is expected to see double digit earnings growth in 2012. Yet this Zacks #1 Rank (Strong Buy) has a price-to-book ratio of just 2.0.

Intrepid produces potash at 2 facilities in Utah and 3 in New Mexico. Headquartered in Denver, it has supplied, on average, about 1.6% of annual world potassium consumption and 9.3% of annual U.S. consumption.

Potash fertilizers are used as a nutrient to grow corn, wheat, soybeans, potatoes, hay and other crops.

2012 Zacks Consensus Estimate Rises

In February, the company saw favorable conditions for the farmers in 2012. Commodity prices remained strong which meant there should be a robust spring planting.

Additionally, Intrepid saw good demand in the industrial potash market as well. It serves the oil and gas drilling markets, including the shale players.

In the last 60 days, the 2012 Zacks Consensus Estimate has moved up to $1.61 from $1.58 per share.

This is earnings growth of 30% as the company made just $1.24 in 2011.

Cash Rich and No Debt

I love companies with solid balance sheets.

As of the end of the fourth quarter, on Dec 31, 2011, Intrepid had $176.8 million in cash, cash equivalents and investments.

It had no outstanding debt.

However, it did have $250 million available under an unsecured revolving credit facility.

A Value Opportunity?

Shares have sold off since hitting a high in 2011.

This has created an opportunity for value investors as valuations have dropped enough to make the stock compelling.

Intrepid now has a forward P/E of 14.1, which is under the 15x cut off I use for value stocks. This isn't the cheapest of the fertilizer stocks but it is within the range I use for value.

Its P/B ratio of 2.0 is also under the 3.0 level I use for value.

The company also has other solid fundamentals, including a 1-year return on equity of 11.2%.

Intrepid Potash is expected to report first quarter results on May 2. It has a rocky track record on beating the estimate, only having done so one time over the last four quarters. Stay tuned.

Tracey Ryniec is the Value Stock Strategist for She is also the Editor of the Turnaround Trader and Insider Trader services. You can follow her on twitter at @TraceyRyniec.

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