Sunday, March 9, 2014

"The ongoing dispute in Ukraine, with the government instability and the involvement of Russia, may create an opportunity for the North American potash and phosphate producers."

Dow Jones Industrial Average 16,452.72 (UP) Week ending 03-07-2014


 Potash - in it's natural state
I have always liked the balance sheet and the financial strength of this company, but the business it was in seemed to usually be in turmoil.

Mosaic Co. (Symbol MOS, $49.73) is a company that was born out of a spin-off from Cargill back in May 2011. MOS is a producer of Phosphate and Potash for fertilizer for agriculture use around the world.

 In February 2014, Mosaic authorized the buy back of $1 billion of their stock, which includes 8.2 Million Class A shares from its former owner, Cargill. Also, in February 2014, Mosaic announced the opening of a plant in Brazil that will employ 1,000 people. Mosaic employs 8,400 people worldwide. 

Mosaic Co. is a leader in the Phosphate and Potash industry, with an excellent global distribution network. The world needs to eat and the world population increases by 75 Million people per year, so there is plenty of ongoing demand for their products.



So, here are the numbers: some good, some bad in the short term. The IBD earnings rating on the MOS stock is 18. Not exactly a ringing endorsement for the stock. The PEG ratio on the stock is 1.98,(NASDAQ), and the Return on Equity is 12.05.

The company does pay a 2% dividend while you wait for the world to get hungry. The Current ratio is 2.48 to 1 and the last 12 months Insiders have been buying up their stock.










 



 Revenues for the company for 2013 were $8.17 Billion dollars with Net Income of $1.584 Billion dollars. The current PE is 19.58 and the forward PE was 17.30. Earnings for 2014 are projected at $2.79 per share and for 2015, the earnings per share look like $3.43. 

The 1 year Total Return on the stock for the trailing 12 months is (-16.21%), but for the last month, it is up 7.06%. The book value for share MOS is $26.53 per share.




So, I see this investment as a 3-5 year long term investment with a lot of upside to come. I think that you should buy the stock here at the current price. We will always need more productive farming and more food in the world. There is never enough.

So, buy this stock and start your own vegetable garden,

Freewilly



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