Real client managed portfolio
This presentation is the property of its rightful owner.
Sponsored Links
1 / 30

Real Client Managed Portfolio PowerPoint PPT Presentation


  • 54 Views
  • Uploaded on
  • Presentation posted in: General

Real Client Managed Portfolio. Presented on October 18 th , 2011 By:. Ran Mu Frank Damian Jionghan Dai Joseph Kim Han Yang. RCMP’s Mosaic Holdings. 12/18/2009 – Bought 200 Shares at $55.00 for total price of $11,000.00 10/17/2011 – Closing Price at $54.49 Unrealized Loss of

Download Presentation

Real Client Managed Portfolio

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -

Presentation Transcript


Real client managed portfolio

Real Client Managed Portfolio

Presented on October 18th, 2011

By:

  • Ran Mu

  • Frank Damian

  • Jionghan Dai

  • Joseph Kim

  • Han Yang


Rcmp s mosaic holdings

RCMP’s Mosaic Holdings

  • 12/18/2009 – Bought 200 Shares at $55.00 for total price of $11,000.00

  • 10/17/2011 – Closing Price at $54.49

  • Unrealized Loss of

  • -$82.00 (-1.00%)


Overview of presentation

Overview of Presentation

  • Industry Analysis

  • Mosaic Company

    • Overview of Business

    • Business Risks

    • Recent Developments

  • Competitor Analysis

  • History of Holdings

  • Multiples Analysis

  • DCF Model

  • Recommendation


Agricultural chemical industry

Agricultural Chemical Industry

Simple products

Capital intensive

Highly concentrated

Strategy

  • Big company: economies of scale

  • Small company: special chemicals for local markets

Sources: First Research


Products

Products

Nitrogen

Potash

Phosphate

Fertilizers

Herbicides

Insecticides

Sources: PotashCorp


Industry macro factors

Industry & Macro Factors

Population

Crops

Fertilizers

Chemical raw materials


Industry factors raw materials

Industry Factors—Raw Materials

Population

Crops

Fertilizers

Chemical raw materials

  • Sulfur

  • Ammonia

  • Sources: Bloomberg


Industry factors crops price

Industry Factors—Crops Price

Crops

Fertilizers

Chemical raw materials

Population

  • Oil Seeds

  • Grain

Average annual growth rate: 1.97%

Average annual growth rate: 5.31%

  • Sources: Bloomberg


Macroeconomic factors population

Macroeconomic Factors—Population

Population

Fertilizers

Crops

Chemical raw materials

Average annual growth rate: 1.60%

  • Sources: Bloomberg


Overview of mosaic s business

Overview of Mosaic’s Business

Two Primary Segments

Phosphate

Potash

Source: Form 10-K, Mosaic Co., FY 2011, Pg 1


Overview of mosaic s business phosphate

Overview of Mosaic’s Business - Phosphate

Source: Form 10-K, Mosaic Co., FY 2011, Pg 1-10


Overview of mosaic s business potash

Overview of Mosaic’s Business – Potash

Source: Form 10-K, Mosaic Co., FY 2011, Pg 1-10


Overview of mosaic s business mines reserves

Overview of Mosaic’s Business – Mines & Reserves

Phosphate Mines

Potash Mines


Economies of scale global presence

Economies of Scale & Global Presence

Potash

Phosphate

  • Largest integrated phosphate producer in the world

  • Production (Fiscal 2011)

    • 57% N. American

    • 13% Global

  • Third largest producer of Potash globally

  • Production (Fiscal 2011)

    • 38% N. American

    • 12% Global

Source: Form 10-K, Mosaic Co., FY 2011, Pg 1

Vertical Integration:

  • International sales offices and distribution centers

    • Presence in Brazil, China and India

    • Largest buyers with growing demand

Source: Mosaic Investment Fact Sheet, Mosaic Co., October 2011, p. 2


Business risk

Business Risk

Outcome????


Recent news

Recent News

Source: Mosaic News Release, Mosaic Co., September 1st, 2011

Source: Mosaic News Release, Mosaic Co., October 12th, 2011

Source: Mosaic News Release, Mosaic Co., October 17th, 2011


Recent news the cargill transactions

Recent News – The Cargill Transactions

Source: Mosaic News Release, Mosaic Co., September 23rd, 2011


Competitor analysis

Competitor Analysis

  • Crop nutrition companies compete primarily on the basis of delivered price

  • Other factors

    • Product quality

    • Cost and availability of raw materials

    • Customer service

    • Plant efficiency

    • Availability of product


World s 10 largest fertilizer companies

World’s 10 Largest Fertilizer Companies


Competitor analysis1

Competitor Analysis

  • Foreign competitors may have cost advantages

    • Cheaper raw materials

    • Less stringent regulatory requirements

    • Owned by government

  • Main competitors

    • Potash Corp. (POT)

    • Agrium Inc. (AGU)

    • CF Industries Holdings, Inc. (CF)


Potash corp pot

Potash Corp. (POT)

  • World’s largest fertilizer company by capacity

    • One-fifth of global potash capacity

  • Potash is the core of the business

    • hold strategic investments in other potash-related businesses in South America, the Middle East and Asia


Agrium inc agu

Agrium Inc. (AGU)

  • Business Growth

    • Capacity expansion

    • Acquisition – acquired AWB, one of Australia’s largest agricultural retailer and grain commodity companies

  • Business operation

    • Retail business unit

    • Wholesale business unit

    • Advanced Technologies business unit


Cf industries holdings inc cf

CF Industries Holdings, Inc. (CF)

  • Acquired Terra Industries Inc. in Apr. 2010

    • Became the largest nitrogen producer in North America

  • Two business segments

    • Nitrogen – 80%

    • Phosphate – 20%


Company performance

Company Performance

Date: Oct. 14, 2011


Company performance1

Company Performance

Cargill Transaction


Multiple valuation

Multiple Valuation

<Change in Price of Product & Sales and Net Income>


Real client managed portfolio

Multiple Valuation

<Business Factors>

  • Growth has been generated by the change in price, not by increase in sales

  • Mosaic doesn’t have control on the price -> increases risk of investment

  • Increase in Price will be stabilized in future -> less growth opportunity

  • Due to the increase in demand, Stable Increase in Sales is expected

<Other Factors>

  • Government Risks

  • Owner Risks


Multiple valuation1

Multiple Valuation


Multiple valuation2

Multiple Valuation

  • <2012 Earning Forecast = $2473 Million, EPS = $5>

  • Based on 1st quarter’s numbers, the price increase in product will continue

  • Sales Volume is expected to increase by 5%

  • Slightly lower margin is expected due to the closed mine and increase in cost of raw materials

  • <Multiple Analysis>

  • Owner Risk is a big discount factor for investors

  • Mosaic is facing 32.57% discount compared to competitors

  • Target PE ratio = 14.07

  • Target Price = 14.07 * 4.71 = $66.21 per share


Recommendation hold

Recommendation - HOLD

Closely watch any developments with the following:

  • Transfer of Ownership – Cargill Transaction

  • Uncertainty with South Fort Meade Mine

  • Recovery of Global Economy and Rising Commodity Prices

DCF Valuation = $55.45

Multiples Valuation = $66.21

50% Weight attributed to each

Final Estimated Share Price = $60.83


  • Login