Should You Hold Mosaic Co. (MOS)?

Ariel Investments, an investment management company, released its “Ariel Focus Fund” first-quarter 2024 investor letter. A copy of the letter can be downloaded here. In the first quarter, the fund increased +7.45% and fell short of an +8.99% return for the Russell 1000 Value Index and a +10.56% return for the S&P 500 Index. Investor enthusiasm around artificial intelligence (AI), resilient corporate earnings growth, falling inflation, and expectations for interest rate cuts this year led the US indices to outperform in the quarter. In addition, you can check the top 5 holdings of the fund to know its best picks in 2024.

Ariel Focus Fund highlighted stocks like The Mosaic Company (NYSE:MOS), in the first quarter 2024 investor letter. The Mosaic Company (NYSE:MOS) produces and markets concentrated phosphate and potash crop nutrients. The one-month return of The Mosaic Company (NYSE:MOS) was -4.87%, and its shares lost 17.86% of their value over the last 52 weeks. On June 10, 2024, The Mosaic Company (NYSE:MOS) stock closed at $28.29 per share with a market capitalization of $9.092 billion.

Ariel Focus Fund stated the following regarding The Mosaic Company (NYSE:MOS) in its first quarter 2024 investor letter:

"There were a few notable performance detractors in the quarter. Shares of producer and marketer of crop nutrients, The Mosaic Company (NYSE:MOS), declined in the period, as weaker than expected phosphates and fertilizer volumes as well as higher raw material and production costs weighed on the bottom-line. Management reiterated expectations for tight global grain and oilseed markets in 2024 and believe growers will continue to be incentivized to maximize yields by applying fertilizers. Meanwhile, MOS is focused on cost discipline, free cash flow generation and paying down debt, while continuing to return significant capital to shareholders through buybacks. Given management’s disciplined approach towards capital allocation, we continue to believe the company is well positioned from a risk/reward standpoint."

A farmer carrying a bag of fertilized over his shoulder signifying the fertilizers the company produces.

The Mosaic Company (NYSE:MOS) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 38 hedge fund portfolios held The Mosaic Company (NYSE:MOS) at the end of the first quarter which was 43 in the previous quarter. While we acknowledge the potential of The Mosaic Company (NYSE:MOS) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

In another article, we discussed The Mosaic Company (NYSE:MOS) and shared the list of best farmland and agriculture stocks to buy according to analysts. In addition, please check out our hedge fund investor letters Q1 2024 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.