Best
Please note this is only an opinion and not financial advice. Direct stock investing is subject to business and market risks. Therefore, it’s highly recommended to do proper risk management and your own due diligence before investing.
Growth Stock Analysis As of 30 September 2023
NYSE: MOS (The Mosaic Company )
- The Mosaic Company is a strong bet in the fertilizer industry, offering a value opportunity for investors.
- The Mosaic Company is one of the world’s leading producers and marketers of concentrated phosphate and potash crop nutrients.
- The Mosaic company continues to exhibit robust performance, marked by rising acquisitions of phosphates and potash in North America and ongoing expansion investments.
- The Potash business segment owns and operates potash mines and production facilities in Canada and the U.S. which produce potash-based crop nutrients, animal feed ingredients and industrial products.
- Mosaic has a wide operational footprint, with mines, processing plants, and distribution facilities located across North and South America as well as Asia.
- From performance fertilizers designed to provide advanced crop nutrition, to top-quality commodity offerings, Mosaic products are optimized to take advantage of today’s most advanced plant genetics, crop protection and equipment technologies.
- Top Shareholdings of The Mosaic Company (MOS):
| Holder | Shares | Date Reported | % Out | Value |
|---|---|---|---|---|
| Capital World Investors | 42,977,559 | Jun 29, 2023 | 12.93% | 1,530,001,034 |
| Vanguard Group Inc | 38,230,409 | Jun 29, 2023 | 11.51% | 1,361,002,502 |
| Blackrock Inc. | 28,240,911 | Jun 29, 2023 | 8.50% | 1,005,376,388 |
| State Street Corporation | 18,064,594 | Jun 29, 2023 | 5.44% | 643,099,518 |
| Invesco Ltd. | 8,523,721 | Jun 29, 2023 | 2.57% | 303,444,454 |
| Geode Capital Management, LLC | 7,163,675 | Jun 29, 2023 | 2.16% | 255,026,819 |
| Capital International Investors | 6,147,438 | Jun 29, 2023 | 1.85% | 218,848,783 |
| Ameriprise Financial, Inc. | 5,852,208 | Jun 29, 2023 | 1.76% | 208,338,595 |
| Northern Trust Corporation | 5,683,482 | Jun 29, 2023 | 1.71% | 202,331,950 |
| Morgan Stanley | 5,474,036 | Jun 29, 2023 | 1.65% | 194,875,673 |
What we think are PROs of The Mosaic Company (MOS):
- Mosaic has a healthy free cash flow conversion, even after the lower commodity price has impacted its topline growth.
- Such companies invest heavily in research and development to develop new products and solutions, staying competitive and meeting evolving customer needs.
- This company has a realistic upside based on earnings growth or multiple expansions/reversions.
- The Mosaic Fertilizantes business segment includes five phosphate rock mines, four phosphate chemical plants, and a potash mine in Brazil.
- The demand comes as food scarcity continues to be a big issue and companies like MOSÂ will be benefited in the future.
- Investing in consistently profitable companies like The Mosaic Co, which has been profitable for 8 out of the past 10 years, generally involves lower risk.
What we think the RISKs are in The Mosaic Company (MOS):
- The Fertilizers and Agriculture Chemicals industry is subject to economic cycles, supply-demand imbalances, and changing market conditions.
- Mosaic uses raw materials like agricultural products and minerals, and fluctuations in commodity prices can affect its production costs and profitability.
- The chemical industry is heavily regulated for safety, environmental, and health reasons.
FUNDAMENTALS:
Dividend (Yield) = 2.25%
Market Cap. = 11.83B
Beta = 1.52
P/E Ratio = 5.56
52 wk Range = 31.44 – 57.46
Revenue = 16.83
EPS = 6.42
- Technicals:
– This chart is on the Monthly candle time frame.
– There is a trendline from the upside which may act as a resistance and after that trendline breakout, the stock may bullish.
– On the Monthly chart Price is taking support at its 200 Exponential moving average (EMA).
– If it falls below our Stoploss then the attractive price will be 20.
– There is a strong support zone towards lower levels and stock may fall 10% more from the current levels to 32-30
– The current support zone also acted as a resistance zone earlier in 2019.
– RSI is trading around 45. So, it may bounce back again after touching 40 levels.
Entry: 32-35
Target: 55 / 74 / 93
Stoploss: 26.50
Our Final Thought: First of all, The Revenue of the Mosaic company is higher than its current market cap with low debt on the book. The company’s stock price compared to future earnings looks good, and its cash flow ratio is the lowest it’s been since 2013. Earnings yield is also decent. The company’s predictions for Q3 sales and prices seem cautious, especially for phosphate. Considering the fair valuation and potential phosphate supply limitations, the stock looks attractive at its current price. On the charts price action is lower-low and we are expecting the double-bottom formation at the 30 levels. If it goes below the last lower swing then you have to exit and wait for $20 which will be the best price for investors. The company also focuses on returning value to shareholders which we think is just another reason for the company to be a long-term addition to a portfolio.
Please note this is only an opinion and not financial advice. Direct stock investing is subject to business and market risks. Therefore, it’s highly recommended to do proper risk management and your own due diligence before investing.
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