Mosaic Still Paints a Picture of Demand for Agriculture
Mosaic (MOS) has been a long-time favorite stock, displaying major upside during good times and holding support in the less good times. At one time, Mosaic (MOS) was a premium trade of the Wall St. Cheat Sheet Monthly Premium Newsletter, yielding premium subscribers an 82.14% gain in 2008. This week, Mosaic issued their Q1 earnings and the stock is experiencing major heat to the upside after today’s crop report. As David Gibbs highlighted in his MOS earnings preview on Monday, $64.20 is a very important price for shares to break back above, and guess what, they have! Here’s the MOS earnings breakdown this week:
Earnings: Q1 profits of $.67 vs. $.70 consensus and a gain of $.23 in Q1 last year, or a skyrocket of nearly triple profits year-over-year. Analysts overshot earnings projections, so Mosaic missed, but year-over-year, the profits are fattening for the better.
Revenue: Increased 50% Year-over-Year t0 $2.19 Billion this year, from $1.46 Billion a year ago. Analysts expected revenue of $1.96 Billion. Top-line growth was a shining light on the quarterly report.
Jim Prokoponko, Mosaic President and CEO said, “We expect the market momentum of the past several quarters to continue as distributors replenish depleted inventories and farmers invest in crop nutrients to rebuild phosphate and potash levels in their soils…global shipments of finished phosphate products are projected to surge to a record-shattering level this year and increase further in 2011.”
Comment: Shares of Mosiac (MOS) are currently trading up 11% following the company’s earnings release Monday, now trading at $65.29 per share, up from $58.79.
According to the technical chart above, Mosaic (MOS) shares gapped up big today and approached the high on the year seen at the beginning of January. Following the surge up, MOS shares have cooled off a bit. Today’s price levels are still trading above the 50-day and 200-day moving averages and above an important point of former resistance $64.20. Agriculture and fertilizer companies received a big push upward following the release of the U.S. Department of Agriculture’s report cutting corn crop estimates this morning. With consolidation and the M&A craze still on the minds of investors in the Ag space (i.e. The Potash Clash), Mosaic should continue to benefit from the positive outlook and growing demand still in play for its appealing shares.