Mosaic (NYSE:MOS) gave its long suffering shareholders some good news when it reported earnings today. The results were positive across the board and should buoy not only its stock today but others in the sector that have yet to report like Potash (POT).
Positives from Mosaic's earning report:
- Posted EPS of $1.19, four cents above estimates.
- Revenues came in at $2.82B, significantly above the $2.55B consensus.
- Announced it will double its dividend to $1.00 a share annually.
- Average phosphate selling price of $494/ton vs. $460-490 expected.
- Average potash selling price $455/ton vs. $420-450 expected.
Four reasons to pick up MOS at under $57 a share:
- The twelve analysts that cover the stock have a median price target of $85 a share on Mosaic. Dahlman Rose upgraded the stock to a "Buy" in late June.
- The stock is selling near the bottom of its five year valuation range based on P/B, P/E, P/S and P/CF.
- The company has a robust balance sheet with approximately 10% of its market capitalization in net cash, it also will now yield around 1.8%.
- The stock looks like it has successfully bottomed, has recent momentum and just crossed over its 200 day moving average (see chart).
Disclosure: I am long MOS, POT.