Sociedad Química y Minera de Chile S.A. has shed at least 50% of its market value in the last 6 months or 26 weeks to be precise because the company has lost ground winning contracts for the supply of potash among major competitors in the fertilizer industry. Nevertheless, I think this a good opportunity to jump in fast and come to the rescue because the market is not discounting the stock price of this magnificent company objectively or with common sense whatsoever. In fact, the main reason explaining the assumption I came up with relies on the fact that this company is the single largest holder of mineral rights for the mining of lithium. Consequently, this feature has immense intrinsic value taking into consideration the steep upside price potential of the mineral in years to come for one strategic reason I will explain briefly. Accordingly, although fossil natural resources including oil as a fuel to power automobiles will be around for a good number of decades to come, oil as an energy source to power cars is an endangered non-renewable resource. Indeed, there is pressure to switch from it taking into account two concerns that matter to many interested parties regarding the wellbeing of the planet. These two concerns are global warming and inability of the oil industry to find reserves in order to cost-efficiently drill for them. Altogether, although there are sufficient proven reserves already discovered and enough to meet demand for at least the next 100 years after accounting for the organic growth in it and everything, I personally do not give the oil industry a life span of more than 70 years. Consequently, since lithium is the indispensable raw material used to manufacture fuel cells and battery packs which are employed to power hybrid and electric cars respectively, the mineral will start gaining value as a commodity steadily and in a steep manner. Similarly, lithium is also the essential raw material used to fabricate batteries found in handheld mobile devices such as smartphones nowadays. In addition, the company has a self-sufficient transportation mechanism out of the Chilean shores in the Atacama Desert by being linked through cross-ownership with Naviera Ultranav Limitada which is the chemicals carrier shipping company owned by the German-Chilean Von Appen brothers. As a result, the two main controlling blocks of the stock are held by Chilean billionaire entrepreneur Julio Ponce Lerou through his listed holding company in Chile known as Sociedad de Inversiones Pampa Calichera S.A. along with the Von Appen brothers who ultimately and together share major decisions regarding business strategy.
To conclude, I strongly think Sociedad Química y Minera de Chile as a stock is a very strong (Buy) right at this juncture now in September for the facts I just explained briefly. In addition, about the existence of pressure in order to do the switching from oil-powered to hybrid and electric cars, all you have to do is read interviews made to Carlos Ghosn, the celebrity CEO of both Nissan Motor Company Limited of Japan and Renault S.A. of France, in order for you to validate my story in full. In fact, the Lebanese-Brazilian-French is considered the number one CEO of the motor industry today and one of the greatest in the entire history of it such as Gottlieb Daimler, Karl Benz, Ferdinand Porsche, Henry Ford, Walter Chrysler, Alfred Sloan Jr., Kiichiro Toyoda, Gianni Agnelli and Lee Iacocca. Moreover, the market value of the company right now stands at $ 7.5 billion from close to $ 15 billion in late March while most of its fundamentals including the main one remain the same. Sales this year are projected to surpass $ 2 billion while profit will stand firm or exceed $ 500 million. Debt stands at $ 1.6 billion while assets constitute $ 4.5 billion. Likewise, the stock has the convenience of trading here in the US as an ADR on the NYSE under the ticker symbol (SQM) just in case you happen to be interested after reading my article.