Back to top

Image: Bigstock

Are Investors Undervaluing Mosaic (MOS) Right Now?

Read MoreHide Full Article

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company value investors might notice is Mosaic (MOS - Free Report) . MOS is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 6.99 right now. For comparison, its industry sports an average P/E of 12.60. Over the past 52 weeks, MOS's Forward P/E has been as high as 30.48 and as low as 6.99, with a median of 17.60.

We also note that MOS holds a PEG ratio of 1. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. MOS's industry currently sports an average PEG of 1.06. Over the last 12 months, MOS's PEG has been as high as 4.35 and as low as 1, with a median of 2.51.

Another notable valuation metric for MOS is its P/B ratio of 1.07. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.35. Over the past year, MOS's P/B has been as high as 1.46 and as low as 0.73, with a median of 1.10.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. MOS has a P/S ratio of 1.17. This compares to its industry's average P/S of 1.56.

Finally, our model also underscores that MOS has a P/CF ratio of 4.90. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. MOS's P/CF compares to its industry's average P/CF of 11.77. MOS's P/CF has been as high as 19.85 and as low as 4.77, with a median of 7.16, all within the past year.

These are only a few of the key metrics included in Mosaic's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, MOS looks like an impressive value stock at the moment.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


The Mosaic Company (MOS) - free report >>

Published in