Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of B- . The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
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Highlights from the ratings report include:
- MOS's debt-to-equity ratio is very low at 0.08 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.58, which clearly demonstrates the ability to cover short-term cash needs.
- 35.60% is the gross profit margin for MOSAIC CO which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 17.10% significantly outperformed against the industry average.
- MOSAIC CO's earnings per share declined by 13.7% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, MOSAIC CO reported lower earnings of $4.40 versus $5.62 in the prior year. This year, the market expects an improvement in earnings ($4.55 versus $4.40).
- MOS, with its decline in revenue, underperformed when compared the industry average of 2.1%. Since the same quarter one year prior, revenues fell by 18.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- In its most recent trading session, MOS has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
The Mosaic Company produces and markets concentrated phosphate and potash crop nutrients for the agriculture industry worldwide. Mosaic has a market cap of $15.35 billion and is part of the basic materials sector and chemicals industry. The company has a P/E ratio of 12.3, below the S&P 500 P/E ratio of 17.7. Shares are up 5.4% year to date as of the close of trading on Wednesday.
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--Written by a member of TheStreet Ratings Staff.
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