Mosaic’s immediate rival, Potash Corp./Saskatchewan (USA) (NYSE:POT), has also been hurt by the slowdown in Indian and Chinese markets. As Motley Fool contributor Maxx Chatsko notes, PotashCorp “is currently responding to oversupply by cutting production levels at its Lanigan and Rocanville mines”. That might only even out the international imbalance caused by the Chinese glut, especially in light of this week’s big fertilizer news:
Uralkali, the world’s largest potash producer, broke an agreement with Belarus this week that had previously accounted for about 43% of global potash exports. As a result, potash prices are expected to plunge by 25% to about $300 per ton by the end of this year. A number of major potash-focused fertilizer producers, including both Mosaic and Potash Corp./Saskatchewan (USA) (NYSE:POT), saw share prices plunge by nearly as much as the expected price drop when the move was made public, and it seems like the drop is not done yet. Before this happened, Mosaic had plans to spend $6 billion on increasing its potash capacity to 11.6 million metric tons by 2015, and to 15 million metric tons by 2021. It remains to be seen if the company will continue with these plans in light of the devastating hit to its near-term profitability.
Putting the pieces together
Today, Mosaic has many of the qualities that make up a great stock, but no stock is truly perfect. Digging deeper can help you uncover the answers you need to make a great buy — or to stay away from a stock that’s going nowhere.
The article Is Mosaic Destined for Greatness? originally appeared on Fool.com and is written by Alex Planes.
Fool contributor Alex Planes has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.
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