Too hard to ignore

K+S is the dominant producer of potash destined for the western European market and a European leader in salt production. The company generated an estimated free cash flow of 1 bn EUR in 2022. In comparison to its a market cap of 4.2 bn Eur, K+S looks extremely undervalued. Estimated dividend yield is 7.5%. The quality AND value scores for this company in our proprietary quality-value framework are a stunning 1.5 standard deviations better than the average European company and better than ever over the last 15 years. There are well identified risks reaching from volatile potash prices to competition in salt market. However, we believe that the company will continue to deliver solid fundamental performance under the current management and valuations are simply too low to resist: we are invested.