Mosaic Co Shares Are Running Into A Ceiling

Mosaic Co MOS stock has rallied nearly 20 percent off the October lows, but is still nowhere near setting new all-time highs. That unfortunately makes the stock a laggard vs. the market and makes the stock a potential target for short-sellers.

Does Mosaic have the fundamental goods to bury the bears? What hurdles does Mosaic need to clear in order for the bulls to win the battle vs. their bearish counterparts?

What The Bulls See

• A nice annual dividend of 2.2 percent.
• Cheap valuation metrics: A price to book ratio of 1.54 and a price to sales ratio of 2.10.
• Good balance sheet metrics: A debt-to-equity ratio of only 34.81, a current ratio of 3.65 and nearly as much cash as total company debt.

What The Bears See

• The dividend payout ratio is at an unsustainable 256 percent.
• Very thin net profit margins of 3.96 percent.
• Expected sales growth for 2015 of -1 percent.

The Technical Take

Technicians note that Mosaic stock is running right into key technical resistance at around the $47.60 level. A break and close above that level would open up room for the stock to run up to the $49-$50 area. However, a failure to take out the $47.60 level on a daily closing basis would embolden the bears and make a tumble down to levels below $40 a stronger possibility, if not a likelihood.