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$131.12 1.69 (1.31%)
7/8/2008 4:07 PM

The Mosaic Company (MOS)

CAPS Rating:
****

The Company is the producers and marketers of concentrated phosphate and potash crop nutrients for the global agriculture industry.

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Avatar sail08 (29.52) Submitted: 5/07/08 11:38 PM : Outperform Start Price: $125.68 MOS Score: 13.33

Mosaic is the worlds #1 phosphate producer and #2 potash producer (13% of global capacity). Increasing global demand for ag products has led to pricing power for fertilizer companies, and product prices and earnings have increased dramatically as a result.

Mosaic is currently trading at 11.3x May 09 EPS estimates of $11.04 (wide range of analyst estimates for 09) and has beaten estimates by 10% or more the last 4 quarters. Mosaic has a 18% profit margin and 30% ROE.

Risks include a change in mandates for US ethanol production which could reduce demand for fertilizer for corn crops.

The stock has been on a tear the past year, but given the supply demand situation it still seems to have room to run.

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