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
See Cramer's multi-million dollar portfolio for FREE and get his new book Get Rich Carefully! Learn More

10 Top Morningstar M&A Stock Picks for 2012

Mosaic

Agricultural and fertilizer giant Mosaic (MOS) 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).

Stock quotes in this article: RIG, MOS, NDAQ, CRL, AGP, NIHD, ABMD, DHX, ICLR, CHS 

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
DOW 16,408.54 -16.31 -0.10%
S&P 500 1,864.85 +2.54 0.14%
NASDAQ 4,095.5160 +9.2910 0.23%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs