Tomahawk, WI 8/02/2013 (Basicsmedia) – The profitability of a company is one of the factors which investors take a close look at before opting to pour their money, or to stay out and wait until the indicators are good enough.  It is also agreeable for investors to look at the potential of a company based on the products and services it offers, and the industry it operates under to judge whether this is a good place to invest or not. This has been one of the major concerns for many prospective investors when talking about Mosaic Co (NYSE:MOS) which outperform others and this article seeks to address those concerns so that investors can decide on their own.

Little background of MOS

MOS, which is The Mosaic Company in full, is a major producer and marketer of agricultural chemicals. It mostly produces and markets potash crop nutrients and concentrated phosphate all over the world. It is still considered to be a relatively new entrant in this field having been founded as recently as 2004, and with its headquarters in Plymouth, Minnesota. Its total number of full time players is currently more than 8k. Some of the companies it has to compete with in this industry are OJSC Uralkali, Israel Chemicals Ltd, and Potash Company of Saskatchewan.

How Stable is the Potash and Phosphate Industry?

Nothing is better than helping investors to check on the potential and profitability of any company than looking at the bigger picture. For MOS, the bigger picture involves taking a look at what the potash and phosphate industry is currently going through, since these are the two major products it offers. Recently, it was announced that the potash industry had faced a huge period of uncertainty which had the capacity of making its prices to drop down. This was after Russia’s Uralkali, decided that it would not hold back the production of potash any more.

The reason why Uralkali made such a decision was because it hoped that this would lead to improved prices for potash all over the world hence leading to better revenues and profits. The reverse happened when the prices of potash took a nosedive. Most companies which deal purely with potash suffered a lot as a result of Uralkali’s decision. MOS was also affected but not as much since it was still able to continue with its production of concentrated phosphate. Out of the $2.7b it got in net sales, $1.7b was from concentrated phosphate only.

3mosaic

This diagram shows stock price performance of MOS in the last one year, and it is courtesy of http://finance.yahoo.com/q/bc?s=MOS+Basic+Chart

Remember that concentrated phosphate remains the primary generator of revenue for MOS. MOS still enjoys some better liberties compared with its competitors where it can always adjust a few factors to work to its favor thus leading to improved margins and reduction in prices. Don’t forget that as a major manufacturer of fertilizers, MOS is in an industry which has great potential due to the increasing demand for food all over the world. If you are to invest in MOS, you are basically proving just how smart you are with making investment decisions.

I would advice anyone interested in investing in MOS to go ahead and do just that. This industry will hopefully continue to enjoy better returns, which will mean more money in the pockets of all shareholders.

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