This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

10 Top Morningstar M&A Stock Picks for 2012

Mosaic

Agricultural and fertilizer giant Mosaic (MOS - Get Report) is Morningstar's largest takeover investment idea, with a market cap at over $22 billion. In 2011 Cargill, a private fertilizer conglomerate and commodity trader, shed its 64% stake in Mosaic, which Morningstar sees as a positive for a takeover attempt by a mining player like Australia's BHP Billiton (BHP).

"We think BHP Billiton is a possible suitor, given its well-documented bid for Potash Corporation of Saskatchewan, which was ultimately unsuccessful," writes Morningstar. Mining giants may look to buy Mosaic's phosphate and potash mining businesses in favor of developing greenfield projects. BHP's closest competitors are Rio Tinto (RTP) and Vale (VALE) and Potash (POT).

With mines in Saskatchewan, New Mexio and Michigan, Mosaic is the world's number one producer of phosphate with a 13% share of global production and it's the second largest North American producer of potash. Because of its Minnesota-based headquarters, Morningstar argues that Mosaic may be a more suitable target than Canada-based Potash, which had previous takeover bids quashed by the government.

Morningstar gives Mosaic shares a four star rating and fair value of $69 a share, an over 25% premium to current share prices of $54.93. Mosaic reported earnings of $1.40 a share on Jan. 4 beating a $1.28 a share consensus estimate compiled by Zacks. Analysts give Mosaic an estimated price target of $64.72 a share on 2012 revenue of $11.5 billion and profit of $2.3 billion, according to data compiled by Bloomberg. For more on Mosaic shares, see 7 fertilizer stocks that hedge funds love and Daniel Loeb's Third Point portfolio.

Within the basic materials space, Morningstar also highlights Cloud Peak Energy (CLD) as a takeover candidate after Rio Tinto divested its blocking position in the low-cost coal producer that has operations in the Powder River Basin. Other takeover candidates are Global Power (GLPW), First Quantum Minerals (FM) and Aptar Group (ATR).
3 of 11

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
DHX $7.79 0.00%
ABMD $77.40 0.00%
CHS $14.97 0.00%
CRL $76.86 0.00%
ICLR $81.48 0.00%

Markets

Chart of I:DJI
DOW 17,598.20 -91.66 -0.52%
S&P 500 2,098.04 -5.80 -0.28%
NASDAQ 5,115.3820 -12.8990 -0.25%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs