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Mosaic (MOS) Reveals Plan to Merge North America Operations

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The Mosaic Company MOS has declared its intentions to merge the company's phosphates and potash operations under one management team, effective Apr 1, 2020. The company expects this move to create new opportunities that will enable it to boost efficiencies by leveraging the synergies between the two organizations.

Mosaic’s current Phosphates business senior vice president, Bruce Bodine, will be leading the combined business from Tampa, FL.

Senior vice president of Potash business, Karen Swager, will be playing a new role and lead the company's North America supply chain, procurement and corporate environmental, health as well as safety. Mosaic is also exploring new, digital solutions, which have potential to transform these areas and deliver considerable value to external as well as internal stakeholders.

Notably, Mosaic stated that it will continue to report under its current business segments. The company is committed to financial transparency.

Shares of Mosaic have lost 43.1% in the past year compared with the industry’s 22.2% decline.

During fourth-quarter 2019 earnings call, Mosaic stated that it expects strong global demand for fertilizers in 2020 based on solid worldwide demand for grains and oilseeds as well as strong farm economics.

Mosaic expects China to be a major factor for phosphate market fundamentals this year in the wake of the coronavirus outbreak. Per the company, a significant chunk of phosphate production in Hubei province has been idled or curtailed due to coronavirus. The company envisions this decline in supply coupled with limited new capacity in other parts of the world to contribute to persistent tightening of phosphate market fundamentals.

The company also noted that production curtailments that started in the second half of 2019 are bringing the potash market into balance this year. It sees strong demand in the Northern Hemisphere for spring. Mosaic also expects a typical surge in activity in the Southern Hemisphere in third-quarter 2020.

Zacks Rank & Key Picks

Mosaic currently carries a Zacks Rank #3 (Hold).

Few better-ranked stocks in the basic materials space are Daqo New Energy Corp DQ, Sibanye Gold Limited SBSW and Impala Platinum Holdings Limited IMPUY, each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Daqo New Energy has an expected long-term earnings growth rate of 29%. The company’s shares have surged 73.9% in the past year.

Sibanye has an expected long-term earnings growth rate of 20.4%. Its shares have returned 115.1% in the past year.   

Impala Platinum has an expected long-term earnings growth rate of 26.5%. The company’s shares have surged 109.1% in the past year.

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