BIGBULL's TOP 7 - Page 7

Aside from the technicals there were several reasons why I chose Mosaic(NYSE:MOS) above its competitors although I most point out that you cannot wrong with any of these fertilizers 3, 4, 5 years from now. I just liked MOS balance sheets relative to its peers better(better balance).

Here was my basic analyses:
MOS profit margin is 23.1%, compared to POT 54% and MON 17.8%.
MOS normalized net income is 1.2B(6.44EPS) and it is trading at a multiple of 5.3X. POT earns 1.3B as well but it is trading at a multiple of 18.5X while MON earn 179M and it its trading at a 18.5X multiple(notice the relevance).
MOS cash flow: 4X earnings, POT 5X earnings anf MON 13X earnings. The thing is, MOS has very little outstanding debt(.09). POT and MON have a higher outstanding dent to payoff(.41, .55 respectively).
MOS ROA is 25.1%, POT is 32% and MON is 13.1%.
MOS ROE 48.5%, POT is 53% and MON is 13.1%.
This is the only stock out of the entire sector that the short interest levels increased by double digits(%) for the Q, up 18%(44 days till 1/2 of those naked shorts have to cover).

Finally, Mosaic has the second biggest balance sheet out of the entire sector making it capable of withstanding any recession that the world may face.

Add: I also needed to see a catalyst going forward. All of these companies have international exposure aside from their domestic markets.

Mosaic has this diversity with their offshore segment. It produces and markets fertilizer products and provides other ancillary services to wholesalers, cooperatives, independent retailers, and farmers in South America and the Asia-Pacific regions.

Their targeting the right markets.

Hold if your intention is to hold over the long run. This is a stock that will trade over $50/share 1-2 years from now. the idea is to get bigger ond the way down.

If you have a trade in mind, hold for the push back above $30 and have a stop near the 52-week low.

Peter,

I did finish sell everything just a few days ago. These positions that I shown on this thread were sold back in the fall.

To address your second question. I would focus on companies that are cahs rich. Look at tech(bio included), healthcare and certain commodities. Names like INTC, MSFT, GOOG, ORCL, CSCO, EMC, AMGN, BMY, UNH, AET, POTm, MOS, RTP, FCX, MRO, etc.

Pick one of each sector and buy them on the dips.
There really isnt much I can say besides that. Just remember to sel everything sometime in 2010

I am going ot keep it as simple as possible:
The coming Option ARM implosion and the proceeding recasts of most vintage loans that mature(cannot be rolled over) in 2010 .

Once banks are forced to recognize these losses on their books(the depreciation of the house value because of higher defaults), you will get a complete collpase of the housing market), pailing in comparison to what we have seen now.

The issue is not modifying the loan(fake money that was somehow created out of thin air from the fractional reserve system), it is the value of that loan that in some cases will lose 4/5'f of its value, bringing real expectations to market levels.

I should add a few points to my comment(s):

1) Some people have asked me that if the issue is the declining value of various assets, then why isn't the administration doing something to prevent this fall in value. The answer is simple, there isn't anythying they can do. The market dictates price. The market is telling you that prices(values) are deemed much lower than what they are now.

2) Most people(44%) are paying NegAm on their mortgages right now. This means their paying interest only on their loan(debt) and not paying off their principle(on the debt), eventhough it increases some 4% every month. Essentially people are getting in a bigger mess as are the banks becuase as I've said before, they'll have to eventually mark these losses on their balance sheets.

3) It is no secret that banks will post huge profits(a mirage that I've alluded to in the past) because of their interest collection but you have to ask yourself this?. How long will this last?.

Lets face it, the US is broke. Period. Take the losses now and re-structure the system. There is no other way.