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Mosaic: The Technical Take

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Mosaic: The Technical Take
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Mosaic Co (NYSE: MOS) has had a tough go of it since February of this year, dropping from $53.75 to a low of $43.33 recently.

Prior to the rally that took the stock up to $53.75, Mosaic had frustrated shareholders with negative performance since peaking out at $63 and change in 2013, all while the broad equity market has hit new highs on a regular basis.

Does the company have the fundamental "goods" to press the stock higher for an extended period of time? Or, are the bulls destined for more disappointment? Below is a quick look at the fundamentals and technicals to answer those questions.

What The Bulls See

  • A nice 2.2 percent annual dividend yield
  • Some cheap valuation metrics:
    • An enterprise value of $17.7 billion versus a market capitalization of only $17.01 billion
    • A price-to-book ratio of 1.68
    • A price-to-sales ratio of 1.86
  • 12.01 percent net profit margins that spin off $387.51 million in positive annual levered free cash flows
  • Decent management metrics:
    • A return-on-assets of 5.32 percent
    • A return-on-equity of 10.52 percent
  • A fairly good balance sheet profile:
    • 37.49 percent debt-to-equity ratio
    • A current ratio of 3.24

    Related Link: Benzinga's Top Upgrades For May Include Mosaic Co

    What The Bears See

  • A P/E of approximately 16 versus a decrease in annual revenues and EPS for 2014 – although the company notably has shown an increase in each for 2015
  • Total debt that easily exceeds total cash
  • The Technical Take

    Technicians note that an uptrend exists on Mosaic's long-term chart and will remain intact as long as $43.33 holds up as support. Below that level, no additional support comes into play until $38.98. For those long of the stock, some horizontal line resistance comes in at the $47.21–$48.23 range and then again at $53.75.
    mos.jpg

    Overall

    Buyers will almost certainly be aggressively stepping in and taking positions if Mosaic comes back down to the $43.33–$43.50 range.

    The company's fundamentals look interesting from a buyer's perspective, especially if the revenues and EPS continue to increase on a quarterly basis after the miserable 2014. This could, barring any earnings disappointments, be a nice story for the bulls.

    Image Credit: Public Domain

    Posted-In: Long Ideas Dividends Technicals Movers Trading Ideas Best of Benzinga

     

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