Mosaic Co. (MOS), North America’s largest producer of phosphate fertilizers and its second-largest producer of potash my be worth a look, Barron’s reports. A number of analysts believe there are good reasons to like the stock over the long term. The newly independent—and discounted Mosaic shares, currently trading over $70, fetch just 12.4x projected 2012 profit, a big discount to the 17.4 average for fertilizer stocks and Mosaic’s own median of 16.5x over the past 20 quarters.
The Plymouth, Minn.-based company also has a robust balance sheet with no debt, and nearly $3.4 billion, or $7.50 a share, in cash. Most of the downside risks, such as a oversupply to push phosphate prices down due to weather and a overhang from the distribution of 64% of its shares held by Cargill, appear significantly factored into the stock price.
Shares of Mosaic traded up 49 cents during mid-day trading on Tuesday. The shares have had a greater than 1 percent range day today, with upside that saw the equity print a NHOD of $72.07. Previous close: $70.04.
The median Wall Street price target on MOS is $85.00 with a high target of $102.00.
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