4. The Mosaic Company (NYSE:MOS)
Number of Hedge Fund Holders: 43
The Mosaic Company (NYSE:MOS) is a Florida-based producer and marketer of concentrated phosphate and potash crop nutrients. The company owns seven potash and phosphate mining facilities and five phosphate concentrate sites in North America. In South America, the company owns thirteen facilities, seven tolls, one port terminal, and 6.6 million tons of blending capacity.
Based on 5 Wall Street analysts’ consensus ratings over the last three months, The Mosaic Company (NYSE:MOS) has a Moderate Buy rating. As of the March 21 market close, the average price target of $38.25 implies an upside of nearly 20% from the current levels.
In the fourth quarter of 2023, hedge fund sentiment was positive toward The Mosaic Company (NYSE:MOS) as 43 hedge funds had investments in the stock with positions worth $565.181 million. This is compared to 35 funds in the preceding quarter with a total stake value of $396.452 million. As of December 31, 2023, AQR Capital Management owns 3.237 million company shares worth $115.67 million in the company and is the most dominant shareholder.
The Mosaic Company (NYSE:MOS) was mentioned in White Brook Capital Partners’ fourth-quarter 2023 investor letter:
“The Mosaic Company (NYSE:MOS) and Green Plains (GPRE), our commodity-sensitive investments, remain substantial positions in the portfolio. The companies are a natural hedge to each other in some ways, as the price of corn is a feedstock for Green Plains while it bolsters the purchasing power of Mosaic’s customers. On the other hand, higher oil prices are a positive for Green Plains, while the opposite is true for Mosaic.
The Mosaic thesis didn’t change during 2023. The world’s potash and phosphate needs grow at a ~2% CAGR, and the price for potash and phosphate, which declined from Covid peaks during 2023, is likely to be at least stable in 2024. Mosaic continues to generate substantial free cash flow on a business with lessening capital intensity, and the balance sheet has a very manageable debt load. The Company’s CEO, Jack O’Roarke, announced his retirement at the end of 2023, but I expect the company to go from strength to strength as long-time heir apparent Bruce Bodine leads the company in 2024. I believe the company will continue to return capital to shareholders through enhanced stock buybacks while investing in high-return brownfield opportunities that will continue to grow long-term free cash flow per share. Additionally, should battery manufacturers adopt more phosphate in their batteries as Tesla and Ford have begun to do, it could significantly change the demand dynamics of one of its two products and ensure Mosaic’s significant cash flows years into the future.”
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