No more wild rides up ahead for Mosaic -- just earnings growth

What few knew then was that a financial crisis was about to plunge the U.S. and global economies into a recession, and result in the exit of many commodity and commodity-related institutional investors from the market. And during their exit these institutional investors, many of them momentum players, totally ignored Mosaic's demonstrated business model, strong position in emerging markets (where the growth is), and increased operational efficiencies. As a result, if you were stopped-out with an MOS position at the previously recommended Stop of $64, that was fortunate.

Unbelievably, Wall Street took MOS down to the absurd level of $16 per share in November 2008. From $160 to $16 in six months: hardly rational pricing.

That said, Mosaic's business model remains impressive, and with the U.S. and the global economies getting set to recover, demand for crop nutrients will resume their upward path: The world's economies are developing and those economies will consume an increasing amount of food on a per capita basis, requiring crop nutrients to grow that food.

Don't look for Mosaic's shares, currently around $50, to go on another leverage era-like wild ride, but one can look forward to impressive gains for MOS, assuming the resumption of U.S. and global GDP growth. The First Call F2009/F2010 EPS estimates for MOS are $5.54 / $6.27.

Stock Analysis: Mosaic is a moderate-risk stock. Consider buying a 25% position in MOS now; then buy another 25% in three months, if U.S. economic conditions don't worsen substantially. Under any circumstance, don't buy more than 50% of your MOS position in the first half of 2009. Sell/Stop Loss if you were to buy shares in this company: $26.
- -

Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.