Back to top

Image: Bigstock

Here's Why Mosaic (MOS) Stock is a Solid Choice Right Now

Read MoreHide Full Article

The Mosaic Company's (MOS - Free Report) stock looks promising at the moment. The company’s shares have popped around 40% so far this year. It is benefiting from higher prices and demand for phosphate and potash.

We are positive on the company’s prospects and believe that the time is right for you to add the stock to the portfolio as it looks promising and is poised to carry the momentum ahead.

Mosaic currently has a Zacks Rank #1 (Strong Buy) and a VGM Score of A. Our research shows that stocks with a VGM Score of A or B, combined with a Zacks Rank #1 or 2 (Buy), offer the best investment opportunities for investors.

Let’s delve deeper into the factors that make this fertilizer maker an attractive choice for investors right now.

An Outperformer

Shares of Mosaic have rallied 70.4% over a year against the 45.9% rise of its industry. It has also outperformed the S&P 500’s 29.4% rise over the same period.


Zacks Investment Research
Image Source: Zacks Investment Research


Estimates Northbound

Earnings estimate revisions have the greatest impact on stock prices. Over the past two months, the Zacks Consensus Estimate for Mosaic for the current year has increased 45.3%. The consensus estimate for third-quarter 2021 has also been revised 80.6% upward over the same time frame.

Positive Earnings Surprise History

Mosaic has outpaced the Zacks Consensus Estimate in each of the trailing four quarters. In this time frame, it has delivered an average earnings surprise of roughly 43%.

Solid Growth Prospects

The Zacks Consensus Estimate for earnings for the current year for Mosaic is currently pegged at $4.68, reflecting an expected year-over-year growth of 450.6%. Moreover, earnings are expected to register a 669.6% growth in the third quarter of 2021.

Growth Drivers in Place

Mosaic is well positioned to leverage increasing global demand for fertilizers and higher realized prices in its businesses. The company expects strong agricultural trends to continue through the second half of 2021, driving demand for fertilizers. Grower economics remain attractive in most global growing regions on strong crop demand, affordable inputs and favorable weather.

The company also forecasts $90-$100 per ton improvement in average realized price in its Phosphates segment sequentially in the third quarter. For the Potash segment, $25-$35 per ton improvement in average realized prices is expected in the third quarter.

Higher crop commodity prices and healthy farm economics are driving demand for fertilizers globally. Global phosphate markets remain robust on solid demand and pricing dynamics. Tight availability along with firm demand is driving up phosphate prices globally. Potash prices have also strengthened on the back of robust global demand, aided by strong grower economics and higher crop prices.

Mosaic is also taking measures to cut costs amid a still-challenging operating environment. Its actions to improve its operating cost structure through transformation plans are expected to boost profitability. Transformational savings are also expected to drive margins in its Mosaic Fertilizantes segment.



Stocks to Consider

Other top-ranked stocks worth considering in the basic materials space include Nucor Corporation (NUE - Free Report) , Olympic Steel, Inc. (ZEUS - Free Report) and Schnitzer Steel Industries, Inc. (SCHN - Free Report) , each sporting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Nucor has an expected earnings growth rate of 494% for the current year. The company’s shares have shot up around 152% in the past year.

Olympic Steel has a projected earnings growth rate of 2,362.2% for the current year. The company’s shares have surged around 135% in a year.

Schnitzer Steel has an expected earnings growth rate of 1,253.5% for the current fiscal year. The stock has also rallied around 141% over a year.