The Mosaic Company (MOS)

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  • commenter
    MT Invest
    Jul 25 12:47 PM
    The Agriculture Boom Goes Bust [view article]
    Andrew, your article has a lot of merit, and I agree with many of your assertions. The facts related to production cost play into the AGs, and to a degree, I think part of your reason for modifying some of your opinions for Ag stocks is based on the sudden and recent decline in oil. It was unpredictable as far as the timing.

    Still, I believe, for all of the right reasons, that stocks like Mosaic, and the AG sector in general continue to offer traders and investors what may be arguably, the safest and potentially the most profitable opportunities in the current market.

    Analysts should not be the catalyst for pulling the trigger on any stock, but good analysts are like trackers--they know what we are hunting for, and they know how to track the prey.

    Many of the best of breed like Goldman Sachs, Credit Suisse, and even S & P continue to reiterate and/or upgrade their ratings for the AG sector and specific stocks with fantastic outlooks, buy and overweight ratings, and high great target prices on stocks such as MOS POT and others. Analysts can be a fickle group so the saving grace about most of these ratings is that they have based their analysis on solid research, fundamentals, and the fact that the dynamics of the AG sector are more straightforward than other sectors.

    With most of the key statistics looking solid, and the products they produce being "Need Based" rather than discretionary, one only needs to use common sense and a Economics 101/102 analysis to arrive at a consensus that AG related goods and services will continue to be in high demand for a predictable period of time.

    The supply and demand side will settle into trend cycle, but we are not at that point yet. Emerging markets are and will continue to grow and demand a greater diversification in diet, as well as more of their traditional foods. Factors like the price of oil, weather conditions, and government policies will play into the Ag sector, but once again, given the absolute need for these products, we should all take some comfort that the Agricultural “Bust” will be short lived.

    On the other hand, I must emphasize that institutional investors (hedge and mutual funds, banks, etc.), may represent the most unpredictable element to for traders and analysts of AG stocks because their market power constitutes an ever present challenge to the savviest of traders.

    Too often, these entities are the primary reason for unwarranted volatility as they manipulate the prices of solid stocks for their institution’s benefit alone.

    The extraordinary power they have to move and/or manipulate the markets by trading stratospheric amounts of shares and their history of turning on a dime during the course of even one day is well documented.

    These firms trade at levels that some governments can’t match, so I don’t consider it a stretch to compare their market moving power to those of weather events like a small hurricanes or winter storms. Needless to say, investors should always be looking over their shoulders and be aware that a hedge fund or other institution can come out of the shadows and we have to board out windows up for a stock or sector storm. The only traders that have the front on their radar are the very people that are doing these massive trades for the institutions.

    It appears that the primary motivation is to control the stock as much as possible and move it in a somewhat predicable fashion that will allow them to safely double and triple dip their profits. They move into a sector or stock because of the great fundamentals, but then move the prices without regard to the fundamentals, good news, or great outlooks of the company or sector.

    My bottom-line on the Ag play is that need based stocks like Mosaic that have great financials and supply and demand fundamentals other sectors would sell their in-laws for, so there is no doubt that the AGs will be able to weather the storms brought on by oil and the institutional investors and once again, move up at a rather sustained pace.

    Mosaic will move back up to around $145 to $165 before September, and we could see a high (spike or otherwise) of around $180 by the end of the year. At this point, 2009 is too hard to call but there will be a new growing and thus a demand cycle for crops for both the Northern and Southern hemispheres, so I am looking for another positive year for AG stocks.

    In the current markets, the Ag sector and well managed companies like Mosaic will continue to represent one of the few areas that offer us all an opportunity to sleep well knowing that the sector will be relatively stable for some time to come.

    Finally, the hedge funds, other institutional investors and short-sellers know their clients want to be where the profits are. These institutions also know that their job is to do it in a manner that provides their clients with a safety edge, and there are few, if any areas that can provide both of those factors like Ag stocks.

    Finally, the institutional investors know the fates of their careers are based on keeping their clients where positioned in sectors that consistently produce the highest profits and have high comfort levels in a volatile or for that matter, non-volatile markets. At this point, there is really no other place for them to go except for a quick dip, so we should all sleep better knowing that the Agriculturals will be relatively stable and wildly profitable for some time to come.
    Reply
  • commenter
    pitchforkpau
    l
    Jul 25 09:08 AM
    Agriculture: Are There Still Bulls in the Supermarket? [view article]
    Amen, Dad! My only question is about natural gas prices & Mosaic cost of producing Nitrogen... Will it have that much of an effect?
    Good article all said & done! I really like MON & BG for the long term... By the way BG is really based in St. Louis too!     Reply
  • commenter
    will
    Jul 25 09:01 AM
    Agriculture: Are There Still Bulls in the Supermarket? [view article]
    Potash should be 250+ right now. The sell-off was a joke and was criminal. Reply
  • commenter
    bzh1111
    Jul 25 03:35 AM
    Agriculture: Are There Still Bulls in the Supermarket? [view article]
    actually. POT's guidance for the full year is 12-13 USD. Comments from the CEO:``I don't see any downturn in our business,'' Doyle, 58, said today on a conference call. ``We see a lot of pricing momentum in our business. We don't see a peak.''

    This is one of the best management I ever met. I think the recent pullback creates an opportunity to buy back again ferts and commodities. Inflation is far from being over around the globe. And although gasoline inventories are starting to show a build up, Crude inventories suggest that the "Peak Oil" theory is still alive.

    Very Good Article.
    Reply
  • commenter
    Skeedaddy1
    Jul 25 02:13 AM
    The Agriculture Boom Goes Bust [view article]
    Ag may have lost it's glamour, but it's demand remains in tact. Reply
  • commenter
    Skeedaddy1
    Jul 25 02:12 AM
    The Agriculture Boom Goes Bust [view article]
    my friend i have to correct you on your theory. Food demand doesn't go down like oil consumption has due to higher cost. Luxury foods might fall down a bit, but the basic necessities that most societies eat (fruits and veggies) need fertilizer to keep the crops producing and giving a strong harvest. Fertilizer demand won't fall off. The BRAC nations have an up and coming middle class who all want to lead better lives, just like the Americans have enjoyed. They'll be able to consume more of the items that in the past were not there for them. Hence bigger food demand equates into a bigger seed and fertilizer demand. We have reached a bump in the road, but even Wallstreet can't stop mankind from growing and evolving. Demand will go up as will AG stocks.


    On Jul 23 01:48 AM Jim Punkrockford wrote:

    > I think we almost have it. The key will be demand. And demand has
    > been strong due to high food COST, not high food demand. As soft
    > commodities have come down, the demand for fertilizers will drop
    > off. Also I agree that the risk reward right here is very bad in
    > the short term. Disclosure I am short MOS.     Reply
  • commenter
    windinmyface
    2
    Jul 25 01:15 AM
    Agriculture: Are There Still Bulls in the Supermarket? [view article]
    Right DAD08. Reply
  • commenter
    your_avid_in
    vestor
    Jul 25 12:53 AM
    Agriculture: Are There Still Bulls in the Supermarket? [view article]
    Tough call here, but I think it is a good idea to be taking a breather here from the ag group. Oil has dropped significantly, so has gold. POT, for example, reported phenomenal Q-2 results, but it is starting to hit resistance trying to break the $210-220 level. One might think the stock is cheap right now considering the company expects to earn an annual $9.50 - $10.50 EPS. That would give the company a P/E of about 20 at $200 a share. the question is if the market is willing to bid this stock up to let's say P/E 25 ($260 stock price) based on the company's current full year guidance. Maybe, but I think there is also a possibility that fertilizer products such as Potash might experience similar downward price pressures as many other agricultural commodities have recently. Reply
  • commenter
    DAD08
    Jul 24 05:05 PM
    Agriculture: Are There Still Bulls in the Supermarket? [view article]
    I do not agree with the fertilizer companies (AGU, POT, MOS, CF, SQM) being associated with commodities. This group should have nothing to do with how commodities trade- however it seems the market still groups the fertilizer companies with the commodity groups. What we are dealing with here is simple- SUPPLY and DEMAND.
    I also must say- the group has NOT traded with a "nearly uninterrupted climb"-- There have been quite a few steep/sharp pullbacks which shake out short term players. It is important to note that each and every one of these pullbacks has been a tremendous opportunity to initiate a position or add to an existing postion- this is no different. Use this pullback to create a postion or add to an existing postion. MOS and CF report next week followed by AGU- I would bet we see a rotation back to what has worked in this market and an exit of the bear market bounce in financials.
    Best of luck to all.
    Disclosure- Long CF, SQM, AGU calls

    Reply
  • commenter
    mwrobison
    Jul 24 11:29 AM
    Why I'm Cutting Some Fertilizer Exposure [view article]
    It look's like Trade Mark was right. Mark, are you buying CF and POT today? Reply
  • commenter
    VBS Srinivas
    Jul 24 12:38 AM
    My Website
    The Agriculture Boom Goes Bust [view article]
    It is high time to think rationally for radical changes. The way energy sectors searching for renewable sources, the Fertiliser Society is to emulate them in searching for traditional/natural manures etc. This is the ultimate answer to the problem. Moreover, judicious utility of the limited non-renewable energy resources is to be practised by one and all honestly to the benefit of future generations. Reply
  • commenter
    zzwildman
    Jul 24 12:15 AM
    The Agriculture Boom Goes Bust [view article]
    natural gas plunges below $10.00 bucks on heavy selling. lets see thursday the natural gas inventories. weather has been hot suggesting usage, however it is turning milder. any build in nat gas will plunge to the 8's.....big boys will be crushed and fertilizer and industrials, consumers will be euphoric.....nat gas will build and plunge... Reply
  • commenter
    Blue collar
    guy
    Jul 23 09:14 PM
    The Agriculture Boom Goes Bust [view article]
    WOW!

    Too many experts, I don't dare sell anything right at the moment. POT, Monsanto, MOS, Mechtel, almost anything having to do with earl (petroleum). No choice but to hang in and wait...hopefully not for a vortex spiraling further downward.     Reply
  • commenter
    David White
    Jul 23 04:06 PM
    The Agriculture Boom Goes Bust [view article]
    I have just looked at the natural gas futures prices. They did peak near the end of June. Hence those prices may have effected this quarter's earnings. However, analysts have been raising estimates on earnings for companies such as Potash consistently. The old saying, "a hundred frenchmen can't be wrong", comes to mind. You have to think that POT will beat earnings. Add that natural gas prices are now back to their March levels. Add that Canpotex has recently raised pricing on potash (the commodity) by 21%. Further this raise is substantiated by worlwide price increases. You have to think that POT will guide higher -- considerably higher. What more could you want??? Reply
  • commenter
    The Dark
    Knight 77
    Jul 23 10:34 AM
    The Agriculture Boom Goes Bust [view article]
    100% percent right, I think stocks with inelastic demand in what we need in these kind of markets



    On Jul 22 10:02 PM Rocknrollleg end193 wrote:

    > Look at what you wrote here, Andrew:
    >
    > "It’s simple economics. Fertilizer prices are not inelastic. High
    > prices are reducing total fertilizer use around the world. We could
    > see a big impact on reduced consumption when the Q2 numbers come
    > out in the next few days."
    >
    > Wrong. Fertilizer prices ARE relatively inelastic. As long as there's
    > a strong demand for food, farmers are gonna try and grow it. In fact,
    > the precise reason for the recent spike in fertilizer prices is BECAUSE
    > of the ever-increasing world food demand. There's a pretty direct
    > correlation between fertilizer prices and food prices, because as
    > DeltaXray7 wisely said, "If farmers want good yields per acre then
    > they have to fertilze [sic]."     Reply

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