Like Caterpillar (NYSE: CAT), Boeing (NYSE: BA), and Microsoft (NASDAQ: MSFT), Potash Corp. of Saskatchewan (NYSE: POT) now offers the opportunities for long term gains due to a recent dip in price.  This profit potential for blue chips on the rebound has been detailed in other articles on this site, with Boeing and Caterpillar recovering after bounces.  Potash is now down to a breakdown in the market structure for its main product.  But it should rebound over the long term, as have Microsoft, Boeing and Caterpillar.

Potash is the world’s largest producer of potash, which is needed for fertilizer and other products.  Like Caterpillar and others in the farming sector, Potash is down due to slumping economic growth in emerging market countries, primarily China.  As much of the world’s population lives in these countries, the greatest demand for agricultural goods emanates from China, India, and others.

Off more than 20% for the week, Potash is now trading at a 52-week.  As a result, its dividend is high.  At present, the dividend yield for Potash is 4.85%. The average dividend yield for a member of the Standard & Poor’s 500 Index is around 2%.

The balance sheet of Potash is solid.  There is little debt.  The price-to-earnings ratio is very low, due to the recent price drop.  Equally impressive is the profit margin of close to 30%.  Another sigh of strength is the high level of institutional ownership at almost 75%.

It should be expected that Potash will rebound.  The strong demand for its products should return.  When that happens, so will the price for the shares. Now trading around $29 a share, the mean analyst target price for Potash over the next year of market action if $44.13.