Mosaic Co (MOS), Potash Corp./Saskatchewan (USA) (POT): You Want to Pay Attention to This Fertilizer Stock Next Week

Mosaic Co (NYSE:MOS)‘s stock was holding up strong until May when a disappointing announcement from the company put a wrench in its growth. The stock has shed 7% over the past three months, making it one of the worst-performing fertilizer stocks for the period. Whether the stock will continue its downfall or recoup its losses will, to a great extent, now depend on what Mosaic Co (NYSE:MOS) has in store for investors when it reports its fourth-quarter numbers next week.

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While numbers will matter, recent developments will likely take center stage in Mosaic Co (NYSE:MOS)’s upcoming report, and that’s where your attention should be. A lot of interesting things are brewing within the company, which could play an important role in determining its future. Mosaic Co (NYSE:MOS)’s outlook will also be critical, given the timing of its earnings release. Here’s what to expect next week.

More money in your pocket?
Among the important information investors should look out for in Mosaic Co (NYSE:MOS)’s upcoming earnings call are the company’s capital allocation plans, especially after the recent disappointing news from Cargill.

Mosaic Co (NYSE:MOS) was spun off from privately held Cargill in 2011, but the latter still holds a 30% stake in the company which it plans to offload after November. To prevent dilution of its shares and the risk of a takeover bid, Mosaic wanted to repurchase shares directly from Cargill before November. Unfortunately, Cargill disagreed, leaving Mosaic with no option but to wait.

More importantly, this development means that Mosaic’s ability to buy back common shares also remains restricted till November. So the likelihood of a share repurchase this year, which the market was banking on, looks dim. Watch closely for an update in Mosaic’s upcoming earnings call. Any hint of a possible buyback this year could boost Mosaic’s share price, especially since peer Potash Corp./Saskatchewan (USA) (NYSE:POT) has already made clear its intentions of announcing a buyback program before the year ends.

Tough times could be in store
It will also be important to see whether Mosaic follows Potash Corp./Saskatchewan (USA) (NYSE:POT)’s footsteps on another count – idling plants for maintenance during the summer months for an extended period of time. Potash Corp./Saskatchewan (USA) (NYSE:POT) plans to shut one of its mines for an additional six weeks this year, which probably looks like a move to tackle the inventory glut. Lower demand from key global markets like India and China last year resulted in a huge imbalance between demand and supply for potash fertilizer, forcing the key potash players – Potash Corp./Saskatchewan (USA) (NYSE:POT), Mosaic, and Agrium Inc. (USA) (NYSE:AGU) – to idle several plants.