Earnings Sneak Peek: Can Mosaic Help Keep Agriculture Names Hot?

Earnings Estimates (High/Mean/Low): $1.00 / $0.724 / $0.56

The Mosaic Company (NYSE: MOS) is set to report Q1 earnings this Monday after the close, and considering the headlines that the Ag sector has been generating over the past couple of months, the Street is sure to pay close attention.  Current mean estimates of $0.724 represent a 215% increase in profits YoY and a 19% loss sequentially.  The conference call is currently scheduled for this Tuesday at 10:00 AM eastern.

In an Ag sector increasingly dominated by the drama surrounding BHP Billiton’s (NYSE: BHP) on-again off-again courtship of Potash Corp. (NYSE: POT), Mosaic has had a habit of falling into the background.  Such was not the case last week, as MOS made some headlines of its own, announcing the completion of its previously announced sale of its investment in Vale Fertilizantes to a subsidiary of Vale S.A. (NYSE: VALE) for approx. $1 billion.  The move should allow MOS to further invest in its core competencies while not materially impacting the company’s crop nutrient blending business.  The sale has been generally well-received by the Street.

From a technical perspective, shares of MOS may be approaching an inflection point of sorts.  After gapping down to the $64.20 range in early January, shares have been unable to break back above that mark for any significant amount of time.  A brief test in mid-March proved to be bogus as shares embarked upon a sustained decline soon thereafter, finally bottoming out under $40 in early July.  Since then, shares rallied steadily towards the aforementioned resistance zone (denoted by the horizontal line on the chart below), finally topping out at $63.94.  A strong report may be exactly what shares need to break through resistance and spark another leg in the stocks post-July 1 rally.

MOS has beaten estimates in five of the past eleven quarters and just two of the past eight, one of which was last Q.

Don’t Miss: How to make money in MOS with “Your Cheat Sheet to Investing in Agriculture” >>

Disclosure: No holdings in MOS.