Trade-Ideas: Mosaic (MOS) Is Today's "Barbarian At The Gate" Stock

Trade-Ideas LLC identified Mosaic (MOS) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

Mosaic

(

MOS

) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Mosaic as such a stock due to the following factors:

  • MOS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $147.6 million.
  • MOS has traded 1.2 million shares today.
  • MOS traded in a range 277.3% of the normal price range with a price range of $2.81.
  • MOS traded above its daily resistance level (quality: 42 days, meaning that the stock is crossing a resistance level set by the last 42 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.

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More details on MOS:

The Mosaic Company produces and markets concentrated phosphate and potash crop nutrients for the agricultural industry worldwide. It operates through two segments, Phosphates and Potash. The Phosphates segment owns and operates mines in Florida. The stock currently has a dividend yield of 3.3%. MOS has a PE ratio of 1. Currently there are 8 analysts that rate Mosaic a buy, 2 analysts rate it a sell, and 4 rate it a hold.

The average volume for Mosaic has been 4.3 million shares per day over the past 30 days. Mosaic has a market cap of $11.4 billion and is part of the basic materials sector and chemicals industry. The stock has a beta of 1.02 and a short float of 3% with 2.65 days to cover. Shares are down 24.5% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Mosaic as a

sell

. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow, generally disappointing historical performance in the stock itself and poor profit margins.

Highlights from the ratings report include:

  • Net operating cash flow has decreased to $583.10 million or 26.77% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • MOS has underperformed the S&P 500 Index, declining 18.87% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • The gross profit margin for MOSAIC CO is currently lower than what is desirable, coming in at 32.43%. Regardless of MOS's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, MOS's net profit margin of 15.70% compares favorably to the industry average.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to the other companies in the Chemicals industry and the overall market, MOSAIC CO's return on equity is significantly below that of the industry average and is below that of the S&P 500.

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