From Barron's Weekday Trader column:
The producer of key crop nutrients stands to benefit from a growing global population and limited arable land.
Looking for a tasty growth story? Here's some food for thought.The article concludes with:
Mosaic (ticker: MOS), with a market capitalization of nearly $31 billion, is the world's largest producer of phosphate and the third-largest seller of potash – both vital crop nutrients. With the global population growing, especially in emerging markets, demand for Mosaic's products should only increase.
"We think Mosaic is a cheap stock now. We have finite land resources in the world, and we need to increase crop production, and Mosaic's phosphate and potash increase yield for grains," says Russell Croft, a portfolio manager at Croft Leominster Investment Management in Baltimore.
Last month, Mosaic announced better-than-expected fiscal-fourth-quarter earnings and a 54% rise in revenue from a year earlier as higher fertilizer prices and increased demand for food boosted results.
Despite the likelihood of continued pricing strength, the stock has been punished by the threat of global economic weakness in recent months.
However, we think it now looks attractive at $69.38, which is 22% below its 52-week high reached in February. In the same span, the Standard & Poor's 500 index has declined 12%. A few hedge funds agree, including Paulson & Co., which invested millions in Mosaic in the second quarter.
Another bull is Ticonderoga Securities analyst Mark Gulley who upgraded Mosaic shares to Buy from Neutral earlier this month and raised his earnings estimates, too. He sees higher-gross margin for potash, which accounts for more than half of earnings. In the U.S., he expects strong profits in 2012 on the back of record commodity prices....MORE
•Hedge funds that added Mosaic shares in the period ending June 30 include TPG-Axon Capital Management (2,845,000 shares), Viking Global Investors (2,492,500), Third Point (2,400,000), Appaloosa Management (2,390,027) and Paulson & Co. (2,250,000), according to StreetSight.net.
