Expect Big Gains from Sociedad Qumica y Minera de Chile

Sociedad Qumica y Minera de Chile (SQM), has not been in the news of late, and so has been off of my radar. Having some spare time this weekend, I have been revisiting a few old friends and this stock has caught my eye for a couple of reasons.

• It's the fourth largest holding in the iShares MSCI Chile Index (ECH).
• That index has performed very well and looks to continue its steady upwards trace.
• At the end of April, SQM reported some surprising figures year on year (Q1 2009 v 2008): net revenue increase of 33% on 2008, with the NYSE traded ADRs providing earnings of $0.33 per share, compared to $0.25 share in Q1 2008. As if that wasn’t enough, to round off this bullish performance, SQM also showed a 39% increase in operating income.

For those that are not familiar with SQM, it is primarily a producer of fertiliser for agricultural, infield use. The company has however diversified into other lines in the past few years.