What Value Investing with Sven Carlin, Ph.D. said in this video:
- MOSbullishlong-termThe host believes MOS is surely very cheap and offers opportunities. High sulfur and ammonia costs have made phosphate production completely unprofitable, forcing the company to draw on its revolver, but potash is stable and asset value (Esterhazy mine, Saudi fertilizer company stake) is substantial. Fertilizer demand cannot be postponed indefinitely; when the cycle turns, pent-up demand and revenge application should drive a strong rebound benefitting MOS. Current mid-cycle yield is about 10%, but a true bargain would require another 40% downside (about $3–4 billion market cap), which could occur if conditions do not improve in six months. He does not currently own MOS but may start a 1–2% position in the next 72 hours and add lower.Source
- NTRneutralThe host views NTR as the more stable fertilizer stock; from 2020 to 2022 NTR rose 250% while MOS rose 600%, showing different leverage. He previously owned more NTR and made better money there, but he gives no forward direction on NTR.Source
- Othernegative for stocksThe host speculates that at some point phosphate application must resume, and perhaps sulfur prices will then go down, creating the opportunity. He is bearish on sulfur prices (expecting a decline), but gives no specific timing.Source
- Othernegative for stockslong-termThe host expects that BHP's Jansen potash project stage one next year and the delayed stage two will add 8 million potash tons per annum, which will likely put pressure on the potash market (pressuring potash prices).Source
- Otherpositive for stocksThe host believes the bad situation in the fertilizer sector (phosphates and potash) will eventually end; when the bounce back comes, there will be a lot of pent-up demand and revenge fertilizer application, benefiting MOS. Analysts focus too much on the next quarter, but the real question is when the complete sector will change.Source