The world’s changed… The market’s changed…

But there are core truths about investing that haven’t changed.

Resilient companies aren’t going anywhere.

And if you can find resilient stocks that also fit into what’s going on in the world…

Then your portfolio is going to do well.

And that’s the kind of stock I have for you in this week’s Stock of the Week.

It’s a key player in our troubled food supply chain… which is only getting worse thanks to the Russia conflict.

But this isn’t a speculative play on global tensions… The company also hits all my metrics for growth, value and income. And it’s about as volatile as Microsoft, one of the safest stocks on the market.

Get all the details on the stock – and its ticker symbol – in this week’s Stock of the Week.

Click on the image below to watch the video.

And be sure to send in the stocks you’d like me to look at with an email to mailbag@manwardpress.com.

Transcript

Look, the world’s changed. The markets have changed compared to what was happening last year to this year. But there are certain eternal truths.

One is that if you’ve got resilient stocks – based on their profitability, their revenue growth, their cash flow, their dividend deals – then they’re not going to go out of fashion. They might dip because you can’t make everything go up every single day, but they should be resilient.

Then tactically within that, if you can find ones which fit what’s happening in the world today, then you should be better off.

My name’s Alpesh Patel… I’m a hedge fund manager, as you know. I’m going to give you my Stock of the Week.

Now, this one came to my attention because it’s in the field of potash. “What the heck’s potash?” you might ask.

Well, my father had a company in India many, many years ago, and he taught me a hell of a lot about chemicals. And one of the chemicals that came up was potash.

The company I’m going to talk to you about is a company called The Mosaic Company (MOS). It was formed in 2004. It’s an American company. It’s the combination of IMC Global and Cargill’s fertilizer business.

I’ve got your attention now, haven’t I? Fertilizer.

Mosaic is one of the world’s leading producers of phosphates and potash, which you need for fertilizer, which you need for food.

Guess which are the world’s top four producers of potash? Well, in the top four, number two, three, and four are Russia, Belarus and China. So we might have some supply chain problems with potash and fertilizer – and therefore food. And we know food prices are already going up. So companies which are not producing in those areas are going to be even in more demand than before. But that’s not the play. I’m not gambling on global conflict and rumors. No, I’m still looking strategically. Is the company well valued, good earnings growth, good revenue growth, dividend deals, cashflow? All those boxes. Then tactically, oh, it happens to be an area which we may well want to look at right now.

So that’s where strategy and tactics fit in.

Okay. So that’s a bit of background on the company and why I’m suddenly interested, more so than ever. In 2021, it was up 70%. So far this year, it’s up 46%. And you might say, “Whoa, that’s already peaked.”

Well, it’s the Stock of the Week for a reason. It’s because I suspect this demand is going to continue to shift away from reliance on Russia and Belarus. Don’t forget the sanctions, in any event. And a real shift away from reliance on China as well.

Cash flow… 5%. Not the biggest, but positive. And it generates cash on the capital it deploys. Sortino, which is a measure of reward compared to volatility or risk of missing that… it’s over one, which is a very positive sign. Very few stocks meet that. Volatility… only 11%, despite those massive rises in stock price. And to give you an idea, it’s roughly the same volatility as Microsoft, which is probably the safest company I can think of.

When I look at some of the bigger figures… return on equity… great. Return on capital employed… See? It’s an efficient company as a measure of quality. Good dividends, safe. Gearing or borrowing is not too large. Don’t have a problem with their forecasted growth, which I suspect will be exceeded. And remember, it’s when the forecasts are exceeded that a company’s share price tends to move even more. And the forecasts I suspect are underestimating just the political will to move to these primary sources of our supply chains – whether it’s energy or food – away from unreliable global partners.

So valuation… forecast price/earnings (P/E)… 6.6. That’s why I think the forecasts are lowballing it, because you can’t have a company at price/earnings of 6.6. It’s ridiculously low when it’s got growth like this. So that’s a clue.

How can I tell that whatever the forecasts are for growth might be lowballing it? Well, I look at the forecast P/E, and if that’s low, the price-to-earnings, then it tells me it’s going to exceed those expectations that are factored in the market, and thereby the stock should outperform.

Anyway, that’s just a little, tiny snippet of some of the research that I go through in my GVI Investor research reports, and that my team do here at the hedge fund and around the world. The documents that I get from other funds, that I get from analysts, that I get from academics, that I get from politicians sometimes… just give me a better, 360-degree mosaic view on what’s happening in the world and how we go about picking the stocks.

So if you’re part of GVI Investor already and get my GVI research, fantastic. If not, this is a bit of a snippet to give you an insight into what we look at and how I look at things.

Thank you very much.