MOS Is A Juggernaut

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Fertilizer producer Mosaic (MOS) reported 2Q22 earnings after the close Monday. While earnings missed estimates and the stock is -3% as a result, I couldn’t care less because they were phenomenal. Revenue increased 92% compared to a year ago and 37% compared to 1Q22. Pricing across its various fertilizers remained strong resulting in adjusted EPS of $3.64.

Let me put that number in perspective. MOS closed Monday at $51.39. If you divide $51.39 by $3.64 you get 14x. 14x is a reasonable valuation for annual earnings and I’m just using one quarter! On an annual basis the multiple is like 5x current year earnings. That’s absurdly cheap for a company in secular growth mode as the world struggles to produce enough food to feed the population. PT: $100

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