Mosaic Co. Stock Analysis and Competitor Comparison
"Discover the stock recommendations, company overview, pros and cons, competitor comparison, and valuation of Mosaic Co., a leading producer of phosphate and potash crop nutrients in the materials industry. Explore key insights to make informed investment decisions."
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Presentation Transcript
MATERIALS COMPANIES Tyler Hone Jian Huang 1
Agenda Sector Overview Stock Recommendations Mosaic Crown Potash SIM Weight Recommendations Q&A 2
OVERVIEW SIM Portfolio (June) S&P 500 (June) 2.85% 2.14% 2.92% 2.10% 1.64% 2.85% 2.60% 3.16% 5.23% 6.01% 22.26% 22.77% 11.13% 10.28% 14.55% 15.27% 8.89% 9.05% 12.15% 12.27% 14.51% 15.36% Information Technology Financials Health Care Information Technology Financials Health Care Consumer Discretionary Consumer Staples Industrials Consumer Discretionary Consumer Staples Industrials Energy Utilities Materials Energy Utilities Materials Telecommunication Services Real Estate Telecommunication Services Real Estate - Currently in-line relative to S&P 500 3
OVERVIEW Source: https://www.google.com/finance?catid=TRBC%3A51&sort=MARKET_CAP&ei=vtljWfH9OYST2AaG24CgDQ Source: http://markets.on.nytimes.com/research/markets/usmarkets/sectors.asp?sector=51 4
STOCK RECOMMENDATIONS Stock Current Price Target Price Upside/Downside SIM Weights Proposed SIM Weights Recommendation Mosaic (MOS) $24.18 $31.80 31.53% 1.26% 1.50% HOLD/BUY Crown (CCK) $59.19 $60.87 2.8% 1.59% 1.59% HOLD Potash Corp (POT) $17.99 $21.57 19.88% 0.00% 0% HOLD - Increase Mosaic weight by 0.24%, increasing the overall Materials weight to 3.09% Overweight compared to the S&P 500 - 5
MOSAIC Co. Company Overview: - A world leader in production and sale of phosphate and potash crop nutrients - Employ nearly 9000 people in 6 countries - Largest Phosphate producer - Sell to 40+ countries Segments: - Potash - Phosphate - International Distribution 6
MOSAIC Co. Pros: - Global operations and expansion - Recent acquisitions of CF Industries, Inc (phosphate) and Archer Daniels Midland company s fertilizer distribution in Brazil and Paraguay (2014) Cons: - Increased Supply, Decrease in demand - Raw Material prices and economic environment - Government regulation - Potential Merger between Potash (POT) and Agrium (AGU) called Nutrien 7
MOSAIC Co. COMPETITOR COMPARISON 8
MOSAIC Co. VALUATION: - Terminal Discount Rate = 11% - Terminal Growth Rate = 3% - Target Price = $31.80 ($33.00 Morningstar) - Upside = 31.53% 9
MOSAIC Co. 10
CROWN Company Overview - Company operated 146 plants in 36 countries - Approximately 24,000 employees. - Found in 1892 - Make metal beverage and food cans, metal aerosol containers, metal closures and specialty packing. Segments - Americas Beverage - North America Food - European Beverage - European Food - Asia Pacific Division 11
CROWN Pros - Steady operation margin growth - Revolutionary technologies for Cans - Defensive stock price - Increasing demand in developing countries Cons - The Company's international operations generated approximately 77% of sales - Raw Material prices and economic environment - Government regulation 12
CROWN Operation margin Income from operations 13.70% 13.54% 12.32% 10.58% 10.15% 9.83% 8.96% FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017E FY 2018E 13
CROWN COMPETITOR COMPARISON 14
CROWN VALUATION: - Terminal Discount Rate = 11% - Terminal Growth Rate = 3.0% - Target Price = $60.87 (Range $58.05-$64.03) - Upside = 4.5% Crown sensitivity analysis 15
CROWN 16
POTASH Company Overview: - World leader in fertilizer by capacity, producing Potash, Nitrogen, and Phosphate - Canadian potash is primary operation, represent more than 1/5 of global capacity - Investments in potash-related businesses in South America, the Middle East, and Asia - Operations and business in 7 countries 17
POTASH COMPETITOR COMPARISON 18
POTASH 19
SIM RECOMMENDATIONS FINAL RECOMMENDATIONS Stock Current Price Target Price Upside/Downsi de SIM Weights Proposed SIM Weights Recommendati on Mosaic (MOS) $24.18 $31.80 31.53% 1.26% 1.50% HOLD/BUY Crown (CCK) $59.19 $60.87 2.8% 1.59% 1.59% HOLD Potash Corp (POT) $17.99 $21.57 19.88% 0.00% 0% HOLD - Increase Mosaic weight by 0.24%, increasing the overall Materials weight to 3.09% Overweight compared to the S&P - 20
Q&A 21
