Mosaic (MOS) has acted much better recently after being a market laggard for most of the year. The company continues to pick up positive comments from analysts and given its cheap valuation could still have some more upside in the coming months.
Recent positives for Mosaic:
- TheStreet reiterated its "Buy" rating on the shares last week.
- Goldman Sachs resumed coverage on the stock today with a "Buy" rating and a $68 price target on the shares.
- Standpoint Research upgraded the stock from a "Hold" from a "Buy" in mid-November
- There was even a takeover rumor that moved the stock in November. Although I put little credence to it due to its market capitalization of over $20B. It is important to remember the Chinese wanted to make a run at Potash (POT) before the Canadian government squashed that effort. It is not entirely outside the realm of possibilities.
- The company moved above its 200 day moving average in late November and has continue to rise since (See Chart).
The Mosaic Company produces and markets concentrated phosphate and potash crop nutrients for the agriculture industry worldwide.
4 reasons MOS still has upside from $56 a share:
- The twelve analysts that cover the stock have a median price target of $85 a share, 50% above the current stock price.
- MOS is selling at just over 10x forward earnings, a discount to its five year average (13.1).
- The stock is selling near the bottom of its five year valuation range based on P/E, P/CF, P/B and P/S.
- MOS yields 1.8% and has quintupled dividend payouts in the last few years. The company paid an additional dividend of $1.25 a share in late 2009, so could be a candidate to announce a special dividend given how many other companies are doing so.