Mosaic (MOS) Flagged As A Storm The Castle 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.

Trade-Ideas LLC identified Mosaic ( MOS) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) 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 $155.4 million.
  • MOS has traded 4.2 million shares today.
  • MOS is trading at 1.77 times the normal volume for the stock at this time of day.
  • MOS crossed above its 200-day simple moving average.

'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize on. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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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 2.4%. MOS has a PE ratio of 15. Currently there are 9 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 3.8 million shares per day over the past 30 days. Mosaic has a market cap of $15.8 billion and is part of the basic materials sector and chemicals industry. The stock has a beta of 1.08 and a short float of 3% with 2.22 days to cover. Shares are down 0.8% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Mosaic as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and attractive valuation levels. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 14.7%. Since the same quarter one year prior, revenues slightly increased by 7.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The current debt-to-equity ratio, 0.38, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, MOS has a quick ratio of 2.06, which demonstrates the ability of the company to cover short-term liquidity needs.
  • MOSAIC CO has improved earnings per share by 48.1% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, MOSAIC CO increased its bottom line by earning $2.69 versus $2.49 in the prior year. This year, the market expects an improvement in earnings ($3.35 versus $2.69).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Chemicals industry. The net income increased by 35.5% when compared to the same quarter one year prior, rising from $217.50 million to $294.80 million.

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