Is The Mosaic Company (MOS) the Best Potash Stock to Buy According to Hedge Funds?

The Mosaic Company (MOS) has been a popular choice among hedge funds, with 40 of them bullish on the stock as of the third quarter of 2021. But is MOS the best potash stock to buy according to hedge funds? Let's dive into the data and find out.



MOS's potash operations have faced operational challenges in recent quarters, with electrical equipment failures impacting production volumes and shipments. Additionally, weather events like Hurricane Francine have negatively affected production. Despite these challenges, hedge funds continue to favor MOS for several reasons:

1. Strategic Joint Ventures: MOS's strategic joint ventures, such as the Ma'aden Wa'ad Al Shamal Phosphate Company, offer low-cost phosphate production with strategic proximity to croplands in Asia, including India's 179 million hectares. These joint ventures provide MOS with a competitive edge in the global market.
2. Geographic Diversity: MOS is strategically positioned to sustainably serve the world's most promising agricultural areas. Its North America Business includes potash and phosphate facilities located in the U.S., Canada, and Peru, while its South America Business includes potash and phosphates facilities across Brazil and in Paraguay. This geographic diversity allows MOS to tap into various markets and mitigate risks associated with relying on a single region.
3. Strong Financial Performance: Although MOS's financial performance in 2023 showed a decrease in revenue and earnings compared to the previous year, the company has a history of strong financial performance. Its disciplined capital allocation and operational excellence have contributed to its strong financial performance and meaningful returns to shareholders.
4. Potential for Growth: Despite recent operational challenges, MOS has the potential for growth in the potash sector. Its Esterhazy K3 Project, which was completed in 2022, signifies the company's commitment to the long-term sustainability of its operations and the vision it has for its future North America Business. This project has the potential to increase MOS's potash production and contribute to its overall growth.



In conclusion, while MOS has faced operational challenges in the potash sector, its strategic joint ventures, geographic diversity, strong financial performance, and potential for growth make it an attractive investment for hedge funds. These factors contribute to MOS's competitive position in the global market and its ability to generate value for shareholders. However, investors should carefully consider the risks and potential rewards before making any investment decisions.

Action Alerts PLUS, which Cramer manages as a charitable trust, is long MOS.