We recently compiled a list of the 10 Best Potash Stocks to Buy. In this article, we are going to take a look at where The Mosaic Company (NYSE:MOS) stands against the other potash stocks.
Global Potash Market: Rising Demand, Key Players, and Future Growth Projections
Potash encompasses various minerals rich in potassium, primarily potassium chloride (muriate of potash), which dominates the global market. Other compounds like sulfate of potash make up the remainder of the market. As the world’s population is expected to reach over 9.7 billion by 2050, the need for potash-based fertilizers will only continue to rise.
The agricultural sector uses more than 95% of the world’s potash production, with the remainder going toward commercial and industrial goods like detergents. The US Geological Survey states that historically, a third of the world’s potash supply has come from Russia and Belarus combined.
In addition to phosphate and nitrogen, potash is necessary for crop health and is vital for plant growth. However, intensive farming depletes potash reserves, making synthetic fertilizers necessary. Potash prices skyrocketed as a result of the conflict between Russia and Ukraine, reaching a high of over $1200 per metric ton in April 2022 before falling to $328 per metric ton, which is still more than pre-Covid levels. As a result, nations like the US, Brazil, and Morocco have looked for substitute suppliers to lessen their dependency on Belarus and Russia. Grants have also been issued by the US to increase regional fertilizer production. You can also see our post on the top fertilizer stocks to purchase based on hedge funds’ 10 Best Fertilizer Stocks to Buy According to Hedge Funds for further information.
The global potash market was valued at USD 57.74 billion in 2022 and is expected to grow at a CAGR of 4.9% from 2023 to 2032, reaching USD 93.50 billion by 2032. The potassium chloride product segment dominated the market with a revenue share of 52.7% in 2022, driven by the surge in agricultural activities. The top 15 national fertilizer markets consume 78% of global potash, while 133 countries consume only 5%. Major players in the potash market include JSC Belaruskali, Compass Minerals, Mosaic Company, Uralkali, and Rio Tinto.
Our Methodology
To rank the 10 best potash stocks, we first conducted sampling, and gathered potash stocks from relevant ETFs. We the narrowed down further based on high upside potential, strong buy analyst recommendations, and large market capitalizations. From this list, we then ranked the top 10 potash stocks according to the number of hedge fund holders in Q1 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A farmer tending to his crops in a field, with a fertiliser bag nearby.
The Mosaic Company (NYSE:MOS)
Number of Hedge Fund Holders: 38
The Mosaic Company (NYSE:MOS) is one of the world’s leading producers and marketers of concentrated phosphate and potash crop nutrients. The company operates through three segments: Phosphates, Potash, and Mosaic Fertilizantes. The company’s newest mine, Esterhazy K3 in Saskatchewan, is due to come online in 2024 and is set to be ‘the largest, most competitive underground potash mine in the world’.
Based on recent forecasts from 10 Wall Street analysts, Mosaic Co has an average price target of $33.22, with estimates ranging from $28.00 to $39.00. This suggests a potential 12.53% increase from the current price of $29.52. In Q1 2024, there were 38 hedge fund holders in the company. D E Shaw held the largest position in the company with 3,419,498 worth $110,996,906, comprising 0.09% of the fund’s total portfolio.
The Mosaic Company (NYSE:MOS) reported net earnings of $45 million in Q1 2024 or $0.14 per diluted share, and the adjusted EPS(1) for the same period was $0.65 and the Adjusted EBITDA(1) was $576 million. The company’s revenues totaled $2.7 billion in Q1, down 26% from the year-ago period due to lower selling prices. Most importantly, their potash operating earnings were $198 million in Q1, compared to $402 million last year.
Overall MOS ranks 2nd on our list of the best potash stocks to buy. You can visit 10 Best Potash Stocks to Buy to see the other potash stocks that are on hedge funds’ radar. While we acknowledge the potential of MOS as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than MOS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
