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Inside Wall Street


Mosaic Is on Fertile GroundBear market or not, some stocks continue to bull their way upward. One is Mosaic (MOS)—not a household name, to be sure, but definitely on a tear. When first highlighted in this column on Mar. 19, 2007, the producer of phosphate rock and potash was trading at 25 a share; it has since catapulted to 148-and keeps rising. "The prices of fertilizers, such as potash and phosphate, have exploded due to escalating global demand," says

William Harnisch, president of Peconic Partners, which owns shares. And the floods in the Midwest and jump in corn plantings are further driving up fertilizer prices, notes Harnisch. All of which is boosting Mosaic's earnings.

Edlain Rodriguez of Goldman Sachs (GS), who added Mosaic (a client) to its "Conviction Buy List" on June 9, says the current consensus forecasts will need revision because they are lower than his recently increased estimates of $13.60 a share for 2009 and $16 for 2010. His 2008 estimate remains at $4.32. Rodriguez figures that strong fertilizer fundamentals will lead to "sustainable pricing in potash and phosphate as supply remains constrained and demand strong." Mosaic is one of the best ways to play these favorable trends, he says, given its leadership in phosphate (No.1) and potash (No.2). And it could use its strong cash flow to initiate a dividend and buy back shares, he says.

Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them.YRC: A Trucker with a TailwindWith oil prices skyrocketing and the economy in a slump, U.S. truckers, like YRC Worldwide (YRCW), are hurting. But this global transportation giant, which owns Yellow Transportation and Roadway Express, may be on the road to recovery. Some see its operating loss in the first quarter as the cyclical bottom in earnings. If that's so, says Art Hatfield of Morgan Keegan (which has done banking for YRC), YRC's results will begin to improve. Analysts are heartened that YRC Chairman and CEO William Zollars on June 17 confirmed his second-quarter profit forecast of 30 cents-40 cents a share, vs. First Call's consensus of 29 cents.

Thom Albrecht of securities firm Stephens, who on May 7 upgraded YRC to overweight from underweight, says "the worst is behind YRC" and sees profits jumping to $1.98 a share in 2009 from 19 cents in 2008. He figures the stock, now at 14, will leap to 28 in a year.

Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them.Access' Chinese ConnectionFew U.S. biotechs do deals in China, but Access Pharmaceuticals (ACCP) recently did just that, signing a licensing pact with Jiangsu Aosaikang Pharmaceutical on June 4. The Chinese company, focused on oncology, will help develop Access' No.1 drug, ProLindac, a platinum-based drug for colorectal cancer, now in Phase 2 U.S. trials. Jiangsu will do trials in China, adhering to Food & Drug Administration rules. In return, Access gets $3 million up front and a 20% royalty on ProLindac sales in China, says CEO Jeff Davis.

Stephen Dunn of Dawson James Securities says "Access has a rich pipeline" not seen in tiny biotechs. Its oral form of insulin starts trials in 2009. Dunn rates Access, now at 2.90, a speculative buy, with a 12-month target of 8. Access is an enticing buyout target, adds William Garrison of Garrison, Bradford & Associates, which owns shares.

Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them.

Marcial writes the Inside Wall Street column for BusinessWeek. In 2008, FT Press published the book Gene Marcial's 7 Commandments of Stock Investing.


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