Posted by on July 27, 2017 8:06 AM
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Categories: Stocks To Watch

Mosaic Company stock is in a continuation pattern with some saying that the company could be a turnaround play. Analysts consensus for the next four quarters are up suggesting the worst could be over. For the next four quarters, the company is estimated to report $7.4 billion in sales, which would mean growth of 5% year-over-year. The company could bounce back from its weak growth that resulted from weak fertilizer prices.

I bought this stock for a quick swing long trade in my personal trading account today. The price of phosphate continues to be a problem for all fertilizer stocks.

Mosaic is impacted by phosphate prices. Mosaic has a larger exposure to that fertilizer compared with other companies.

Phosphate prices have been falling for many years now which has put a downward pressure on Mosaic.

Mosaic Company Stock

The chart shows a classic turnaround with a continuation pattern taking it higher. MOS does present a decent setup opportunity. Note the positive divergence between Large Players volume and the price of the stock. Large Players volume shows big players have been accumulating this stock for over a month now. The Twiggs Money Flow confirms the stock is being accumulated.

A pullback is taking place, which presents a good swing long opportunity for an entry in Mosaic Company stock. The idea is to go for a quick swing long trade on the pullback, inside the continuation pattern. I did a lesson on how the continuation pattern fits into a larger scheme of phases a stock goes through here.

The Mosaic Company Review
  • Profitability (Return On Assets, Return On Equity, and Profit Margin)
  • Valuation (P/E, Forward P/E, PEG, Book Value, Price to Book Ratio)
  • Growth (EPS and Revenue)
  • Health (Current Ratio, Quick Ratio, Debt to Equity, Altman-Z Score)
2.0

Summary

Profitability

MOS's Profit Margin of 215.94% is among the best returns of the industry. MOS outperforms 87% of its industry peers. The industry average Profit Margin is 102.88%. MOS has a Return On Asserts of 1.41%. This is below the industry average of 3.56%. MOS has a Return On Equity of 2.48%. This is below the industry average of 9.72%. 91% of the industry peers outperform MOS.

Valuation

With a price book ratio of 0.86, MOS is valuated rather cheaply. When comparing the price book ratio of MOS to the average industry price book ratio of 1.83, MOS is valuated rather cheaply. With a Price/Earnings Ratio of 214.09, MOS can be considered very expensive at the moment. With a Price/Earning Ratio of 214.09, MOS is valued higher than the industry average, which is at 23.67. 100% of the companies listed in the same industry are cheaper than MOS! With a Forward Price/Earnings Ratio of 27.07, MOS is expensive. The high PEG Ratio, which compensates the Price/Earnings for growth, indicates MOS does not grow enough to justify the current Price/Earnings ratio.

Growth

Based on estimates for the next 2 years, MOS will show a quite strong growth in Earnings Per Share. The EPS will grow by 14.95% on average per year. When comparing the growth rate of the last year to the growth rate of the upcoming 2 years, we see that the growth is accelerating. Measured over the past 5 years, MOS shows a decrease in Revenue. The Revenue has been decreasing by -7.10% on average per year. MOS shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -79.56%. The earnings per share for MOS have been decreasing by -16.11% on average. This is bad.

Health

A Current Ratio of 1.97 indicates that MOS should not have too much problems paying its short term obligations. The Current Ratio is inline with the industry averages, which is at 1.97. MOS has a Quick Ratio of 1.03. This is a normal value and indicates that MOS is financially healthy and should not expect problems in meeting its short term obligations. The Debt to Equity ratio of MOS is inline with the industry averages. MOS has an Altman-Z score of 2.09. This is not the best score and indicates that MOS is in the grey zone with still only limited risk for bankruptcy at the moment. MOS has a Altman-Z score comparable to the industry average, which is at 2.09. When comparing the Quick Ratio of MOS to the average industry Current Ratio of 1.16, MOS is less able to pay its short term obligations than its industry peers.

Fundamental analysis courtesy of Chartmill. Get thousands of fundamental analysis opinions on all your favorite stocks here.

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Lance Jepsen

For ethical purposes, I try not to hold any position in any stock I profile on GuerillaStockTrading.com unless specifically stated in the article. Owner of GuerillaStockTrading.com. Seasoned entrepreneur, investor, and writer. I love God, family, country, stock trading, economics, and helping people learn how to trade.
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