The Fertilizer Company Pushing Back Against the Grain Crisis
We are in the middle of what some are calling a “grain crisis.”
Staple crops like corn and wheat, if farmers can plant them at all, are struggling under severe weather conditions. Canada’s “Corn Belt,” for example, is experiencing an unseasonably hot and dry spring with temperatures reaching 90 degrees Fahrenheit for days on end, while heavy rains and flooding damaged other farms throughout the Dakotas and Minnesota.
This, on top of disruptions in Ukraine’s growing season due to Russian occupation, has pushed wheat prices through the roof. Wheat per bushel in the United States is now 81% higher than it was this time last May due to increased demand and limited supply.
Food inflation will continue to be a problem. Growers that can manage a good crop this year will need all the help they can get to reap maximum yields – and the company I am recommending today may offer such help.
Watch today’s Take It to the Bank Tuesday below, or see below to read the transcript.
05/17/2022 Take It to the Bank Tuesday Transcript
Hey everybody! Shah Gilani here with your Take It to the Bank Tuesday, where I recommend what you should do with $100 today – as in, right now.
This Tuesday, guess what’s hot? Inflation.
What’s the hottest part of inflation? Food prices.
We know why, we know what’s going on. We’ve got weather issues. We’ve got war in Ukraine – Europe’s bread basket. We’ve got certain commodities not even being planted. Certain crops, like wheat, hitting close to record highs. And we’ve got a growing season that’s been compromised as planting is not… Shall we say, it is not progressing in certain areas, like Eastern Ukraine – and elsewhere due to flooding.
Food inflation will continue to be a problem.
So, for your $100 today, I’m recommending a company that facilitates growing crops.
The Mosaic Company (MOS) mines, manufactures, and sells phosphates, fertilizers, all kinds of stuff that is used by farmers to boost yield.
This is a huge company. The capitalization of this is about $21 billion. Revenues are huge, too. In the last 12 months, its revenues were a whooping $12.36 billion with a beautiful profit margin of 13%. It makes a lot of money.
And revenue growth year-over-year is north of 56% – based on the last quarter and year-over-year basis. Holy mackerel… 56% revenue growth, people.
Now, its products are hot but the stock is not. It’s come off of its recent highs.
It got north of $79 a share in April, now it’s trading at $63 and change. That’s an opportunity to get in, people. This is a company that will continue to do well. As long as there are food-planting issues, as long as we need crops to grow around the world, we’re going to need everything that Mosaic sells – not just the fertilizers and phosphates. MOS sells deicing products, water software products, and others that I think are going to be hot and continue to be hot for a long time.
But, I’m really digging down into what I think is the prime mover for the stock, and that’s going to be the fertilizer component.
So, for your $100 today, buy Mosaic (MOS) on the cheap. I think the stock can get to $88. I think I can certainly bust through the $79 highs from April – that’s about a 40% gain.
If you’re nervous in here – and you should be nervous because the market is all over the place – put your stops in. I do just to be safe. Put in a 15% stop here. If you get in at $63, that will take you around $54 and there’s support right around there. Just a little bit above there, actually.
But I don’t think we’re going to see that $54. I think you’re gonna see $88 after that, beyond that even. The last high for MOS was $160. It’s going to take a while to get back there, but I love MOS.
With your $100 today, go buy yourself $100-worth of MOS and take it to the bank. Cheers.