Trade-Ideas: Mosaic (MOS) Is Today's Post-Market Laggard Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Mosaic ( MOS) as a post-market laggard 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 $294.6 million.
  • MOS is down 5.2% today from today's close.

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More details on MOS:

October 5 FQ1-2011 Results: - FQ1-11 Guidance: Potash 1.6-1.9Mt @ $310-$340 tonne. Phosphate 3.3-3.6Mt @ $430-460/tonne. - Sustaining capex of $450-500M/yr FY2011 capex $1.4-1.6bn to grow potash (excludes $350m Bayovar payment). The stock currently has a dividend yield of 2.3%. MOS has a PE ratio of 10.4. Currently there are 10 analysts that rate Mosaic a buy, no analysts rate it a sell, and 8 rate it a hold.

The average volume for Mosaic has been 7.1 million shares per day over the past 30 days. Mosaic has a market cap of $13.2 billion and is part of the basic materials sector and chemicals industry. The stock has a beta of 1.57 and a short float of 6.5% with 2.84 days to cover. Shares are down 21.6% year to date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Mosaic as a hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and a generally disappointing performance in the stock itself.

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 2.82, which clearly demonstrates the ability to cover short-term cash needs.
  • MOSAIC CO' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, MOSAIC CO increased its bottom line by earning $4.43 versus $4.40 in the prior year. For the next year, the market is expecting a contraction of 14.7% in earnings ($3.78 versus $4.43).
  • Net operating cash flow has decreased to $854.70 million or 30.47% 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.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Chemicals industry average. The net income has decreased by 4.2% when compared to the same quarter one year ago, dropping from $507.30 million to $485.90 million.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

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