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Value Trade or Value Trap: The Ferts

* Please note that this post was revised on Friday March 25th to include an exact quote from Joe Terranova and also to include information provided by Intrepid Potash refuting Terranova's statement.

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With Monsanto, Potash, and Agrium all losing ground over the past month, are fertilizer stocks a value trade or trap?

The question gets a little more complicated when you look at their performance over the past year.

In that time frame they've all doubled the performance of the S&P. Take a look:

Ferts. 1-yr. Performance
Potash +36%
Mosaic +28%
Agrium +26%

What should you make of it?

Joe Terranova feels the space is very volatile and suggests investors pick and choose. He likes Potash, but not IPI "a little bit too much debt there," Terranova says. He’s also bullish Bunge. However he counsels “steer clear of the high fliers.”

As mentioned above we were subsequently contacted by Martin D. Litt, Intrepid Potash executive V.P. and general counsel who tells us Terranova's statement about Intrepid Potash was inaccurate. Litt says "IPI has $0 debt, cash and investments of $143 million, and availability under its credit line of $125 million." He cites IPI’sForm 10-K, filed with the SEC on February 24.


Guy Adami suggests putting Deere on the radar. He thinks it’s “making a push up toward $100.”

Steve Cortes is bearish. He’s short the DBA in anticipation of demand destruction.

Tim Seymour thinks if you want to play the farm trade, play it long wheat.

* You can find our conversation with the traders about 4 minutes into this video.

** Please note all trades presented in this post are based on the opinions of the Fast Money traders.




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Trader disclosure: On March 24, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Guy Adami is Long (AGU); Guy Adami is Long (MSFT); Guy Adami is Long (C); Guy Adami is Long (INTC); Guy Adami is Long (NUE); Guy Adami is Long (GS); Guy Adami is Long (BTU); Steve Cortes is Long (TM)p; Steve Cortes is Long (EXC); Steve Cortes is Long (GS); Steve Cortes is Long (SO); Steve Cortes is Short (F); Steve Cortes is Short (BAC); Steve Cortes is Short (DBA); Steve Cortes is Short Natural Gas; Steve Cortes is Short Silver; Steve Cortes is Short Wheat; Steve Cortes is Short Corn; Steve Cortes is Short Beans; Steve Cortes is Short Japanese Yen; Joe Terranova is Long (C); Joe Terranova is Long (VRTS); Joe Terranova is Long (GS); Joe Terranova is Long (JPM); Joe Terranova is Long (UPL); Joe Terranova is Long (MS); Joe Terranova is Long (PBR); Joe Terranova is Long (BAX); Joe Terranova is Long (TEVA); Joe Terranova is Long (IBM); Joe Terranova is Long (BTU); Joe Terranova is Long (POT); Joe Terranova is Long (XOM); Joe Terranova is Long (DIS); Joe Terranova is Long (RSX); Joe Terranova is Long (CNQ); Joe Terranova is Long (CNX) Puts; Tim Seymour is Long (AGU); Tim Seymour is Long (BAC); Tim Seymour's Firm is Long (POT)

For Brian Kelly
Accounts managed by Kanundrum Capital Are Long (TLT)
Accounts managed by Kanundrum Capital Are Long U.S. Bonds
Accounts managed by Kanundrum Capital Are Long (GLD)
Accounts managed by Kanundrum Capital Are Long (SLV)
Accounts managed by Kanundrum Capital Are Long Gold
Accounts managed by Kanundrum Capital Are Long Corn
Accounts managed by Kanundrum Capital Are Long Soybeans
Accounts managed by Kanundrum Capital Are Long Wheat
Accounts managed by Kanundrum Capital Are Long Euro
Accounts managed by Kanundrum Capital Are Long (VLO)
Accounts managed by Kanundrum Capital Are Long (RDC)|
Accounts managed by Kanundrum Capital Are Long (MCP)
Accounts managed by Kanundrum Capital Are Short Yen
Accounts managed by Kanundrum Capital Are Short (XLF)
Accounts managed by Kanundrum Capital Are Short (IXG)

For Dennis Gartman
Funds managed by Dennis Gartman are Long Gold
Funds Managed by Dennis Gartman are long Oil
Funds Managed by Dennis Gartman are long Canadian Dollars
Funds Managed by Dennis Gartman are long Australian Dollars
Funds Managed by Dennis Gartman are long Corn
Funds Managed by Dennis Gartman are long Sugar
Funds Managed by Dennis Gartman are long Natural Gas
Funds managed by Dennis Gartman are Short Euros

For Rich Volpe
**No Disclosures**

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For Scott Nations
Scott Nations is long (SPY)

For Heather Jones
BB&T Capital Markets is a Market Maker in (SFD)
BB&T Capital Markets is a Market Maker in (TSN)
BB&T Capital Markets expects to receive or intends to seek compensation for investment banking services from Smithfield Foods, Inc. and Tyson Foods, Inc. in the next three months.
An affiliate of BB&T Capital Markets received compensation from Smithfield Foods, Inc. and Tyson Foods, Inc. for products or services other than investment banking services during the past 12 months. The analyst or employees of BB&T Capital Markets with the ability to influence the substance of this report know or have reason to know the foregoing facts.


CNBC.com with wires.