$MOS at less than tangoble book value is a buy
I think the chart tells the story:
MOS
is trading at the lowest price to book multiple (see lower pane) since the pandemic, which was also the low point over the past 20 years. In addition, there's a buy signal from a AB=CD pattern visible on the chart. The symmetric triangle short play has in fact reached its T1 target and may be played out. In addition, the stock looks poised to break through its longer-term down trend. If that should happen, I think it will accelerate the upside.
The reason for MOS' slump are simple enough: Soybean and corn prices are low, and those are primary uses for Mosaic's fertilizers.
On the plus side, though, MOS has been building financial strength over the past years, and its new and ramping Esterhazy (K3) mine in Saskatachewan, Canada isn't just the largest potash mine in the world, it's also one of the lowest cost ones. Meanwhile, the company has curtailed production at its (higher cost) Colonsay mine, also in Saskatchewan.
I think even without a recovery in fertilizer application (which will undoubtedly come), this setup promises higher margins for Mosaic.
MOS
is cheaper than its fertilizer peers
CF
and
NTR
based on price/book or price/sales, and its forward P/E is in single digits -- far below the market. While I think that historically, the discount to peers was justified by MOS' inferior cost position, I would argue that the company has made strides to catch up.
I plan to enter a long tomorrow. This will be a long-term hold, so no target or stop loss.
MOS
is trading at the lowest price to book multiple (see lower pane) since the pandemic, which was also the low point over the past 20 years. In addition, there's a buy signal from a AB=CD pattern visible on the chart. The symmetric triangle short play has in fact reached its T1 target and may be played out. In addition, the stock looks poised to break through its longer-term down trend. If that should happen, I think it will accelerate the upside. The reason for MOS' slump are simple enough: Soybean and corn prices are low, and those are primary uses for Mosaic's fertilizers.
On the plus side, though, MOS has been building financial strength over the past years, and its new and ramping Esterhazy (K3) mine in Saskatachewan, Canada isn't just the largest potash mine in the world, it's also one of the lowest cost ones. Meanwhile, the company has curtailed production at its (higher cost) Colonsay mine, also in Saskatchewan.
I think even without a recovery in fertilizer application (which will undoubtedly come), this setup promises higher margins for Mosaic.
MOS
is cheaper than its fertilizer peers
CF
and
NTR
based on price/book or price/sales, and its forward P/E is in single digits -- far below the market. While I think that historically, the discount to peers was justified by MOS' inferior cost position, I would argue that the company has made strides to catch up. I plan to enter a long tomorrow. This will be a long-term hold, so no target or stop loss.
Transaction en cours:
I bought in at 32.56. Certainly not the best price of the day, but this is for the long haul.
Commentaire:
"Tangoble Book Value" -- LOL. It's tangible book value, I know. TV doesn't allow me to edit the title.
Commentaire:
I am adding to my position.
