Here is why the smart money is after ELM!Fertilizer producer...

Here is why the smart money is after ELM!

Fertilizer producer stocks were hit by last week's sell-off; however, investment firms are maintaining their bullish stance on the sector's outlook.

Today, UBS raised its demand estimates for potash- citing higher prices for agricultural commodities.

Source: Potash Investing News - Click here

The bank raised its price target on Potash Corp of Saskatchewan (NYSE:POT) to $70 from $66, and its estimates on Agrium (TSE:AGU) to $110.

2011 has been a year of high profits for potash and phosphate producers, that have been benefiting from high demand and recovering prices. The latest companies to announce improving margins include K+S Ag and CF Industries (NYSE:CF).

German-based K+S Ag, Europe's biggest potash producer, said first-quarter profit surged 70 percent as prices for the crop nutrient rose and the nitrogen-fertilizer division's earnings more than tripled. Net income jumped to 293.6 million euros ($421 million) from 172.3 million euros. The nitrogen unit's earnings before interest, taxes and hedging transactions increased to 49.6 million euros from 14.5 million euros, and its sales rose 26 percent. The potash unit's earnings advanced 34 percent as the company lifted prices in March for the fifth time since early 2010.

Fertilizer maker CF Industries Holdings Inc. posted first-quarter earnings of $282 million after losing $4.4 million a year earlier. Last Thursday, CF announced net income of $3.91 per share, compared with last year's loss of 9 cents per share. Revenue more than doubled to $1.17 billion, from $502.4 million a year earlier. Analysts were expecting revenue of $1.19 billion. The revenue gain came from higher product prices and the inclusion of an acquired company, Terra. The acquisition caused the company's sales volume to nearly double to 3.3 million tonnes in the most recent quarter.