Should You Hold Mosaic (MOS) for the Long Term?
White Brook Capital Partners, an investment management firm, released its fourth-quarter 2023 investor letter. The same can be downloaded here. In 2023, the fund returned 8.38% compared to the Midcap 400 Index’s 16.45% and the S&P 500 Index’s 26.04% returns. The dominance of major tech companies fueled a 26% rise for the S&P 500 in 2023. The market surged in 2023 fueled by a robust economy and AI optimism. In addition, please check the fund’s top five holdings to know its best picks in 2023.
White Brook Capital featured stocks such as The Mosaic Company (NYSE:MOS) in the fourth quarter 2023 investor letter. Headquartered in Tampa, Florida, The Mosaic Company (NYSE:MOS) is a crop nutrient manufacturer. On January 26, 2024, The Mosaic Company (NYSE:MOS) stock closed at $32.23 per share. One-month return of The Mosaic Company (NYSE:MOS) was -9.80%, and its shares lost 33.55% of their value over the last 52 weeks. The Mosaic Company (NYSE:MOS) has a market capitalization of $10.534 billion.
White Brook Capital stated the following regarding The Mosaic Company (NYSE:MOS) in its fourth quarter 2023 investor letter:
"The Mosaic Company (NYSE:MOS) and Green Plains (GPRE), our commodity-sensitive investments, remain substantial positions in the portfolio. The companies are a natural hedge to each other in some ways, as the price of corn is a feedstock for Green Plains while it bolsters the purchasing power of Mosaic’s customers. On the other hand, higher oil prices are a positive for Green Plains, while the opposite is true for Mosaic.
The Mosaic thesis didn’t change during 2023. The world’s potash and phosphate needs grow at a ~2% CAGR, and the price for potash and phosphate, which declined from Covid peaks during 2023, is likely to be at least stable in 2024. Mosaic continues to generate substantial free cash flow on a business with lessening capital intensity, and the balance sheet has a very manageable debt load. The Company’s CEO, Jack O’Roarke, announced his retirement at the end of 2023, but I expect the company to go from strength to strength as long-time heir apparent Bruce Bodine leads the company in 2024. I believe the company will continue to return capital to shareholders through enhanced stock buybacks while investing in high-return brownfield opportunities that will continue to grow long-term free cash flow per share. Additionally, should battery manufacturers adopt more phosphate in their batteries as Tesla and Ford have begun to do, it could significantly change the demand dynamics of one of its two products and ensure Mosaic’s significant cash flows years into the future."
A farmer tending to his crops in a field, with a fertiliser bag nearby.
The Mosaic Company (NYSE:MOS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 35 hedge fund portfolios held The Mosaic Company (NYSE:MOS) at the end of third quarter which was 38 in the previous quarter.
We discussed The Mosaic Company (NYSE:MOS) in another article and shared the list of best very cheap stocks to buy according to hedge funds. In addition, please check out our hedge fund investor letters Q4 2023 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
