MOS 29.78 (+3.22%)
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Last update on 2024-06-06

Mosaic (MOS) - Piotroski F-Score Analysis for Year 2023 (Final Score: 5/9)

In-depth Piotroski F-Score analysis of Mosaic (MOS) for 2023. Discover the financial position, profitability, and liquidity trends with a final score of 5/9.

Knowledge hint:
The Piotroski F-Score is a number between 0 to 9 which reflects the strength of a company's financial position. It is based on 9 criteria involving profitability, liquidity, and leverage. This model helps investors identify stocks that are strong, undervalued investments.
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Short Analysis - Piotroski Score: 5

We're running Mosaic (MOS) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

Criteria
Company has a positive net income?
1
Company has a positive cash flow?
1
Return on Assets (ROA) are growing?
0
Operating Cashflow are higher than Netincome?
1
Leverage is declining?
0
Current Ratio is growing?
1
Number of shares not diluted?
1
Cross Margin is growing?
0
Asset Turnover Ratio is growing?
0

The Piotroski F-Score is a method for analyzing a company's financial stability and predicting its potential for good investment. It's scored between 0 and 9 based on nine financial criteria related to profitability, liquidity, and operating efficiency. Mosaic (MOS) was rated using this system and scored 5 out of 9, suggesting it has some strengths and weaknesses.

Insights for Value Investors Seeking Stable Income

Mosaic (MOS) shows a positive net income and cash flow from operations, indicating profitability and good operational performance. The company also keeps earnings backed by cash, has a slight improvement in its current ratio, and has reduced outstanding shares, which is good for shareholders. However, its return on assets and asset turnover ratios have decreased, and its leverage ratio has increased along with a decline in gross margin, suggesting growing financial risk and declining efficiency. Given this mixed performance, it might be worth investigating further but with caution, especially in comparison to industry peers.

For those who are interested in delving deeper into the specifics, the subsequent section provides a comprehensive exploration of the criteria.

Profitability of Mosaic (MOS)

Company has a positive net income?

This criterion evaluates whether the company has been profitable over the last fiscal year by checking if the net income is positive. Positive net income is a sign of good profitability.

Historical Net Income of Mosaic (MOS)

For the fiscal year 2023, Mosaic's (MOS) net income stands at $1.1649 billion, marking a positive outcome. Historically, comparing this figure with the last 20 years, interesting trends emerge. Mosaic has experienced both highs and lows, with peak net incomes in years like 2007 and 2011, surpassing $2 billion. The company has also weathered losses as recent as 2019 and 2018. On balance, with 2023 being a profitable year, we allocate 1 point for this criterion. The increasing profitability points towards a potentially resilient business model, as recent years post-pandemic show significant recovery.

Company has a positive cash flow?

This criterion examines whether the company's Cash Flow from Operations (CFO) is positive. Positive CFO indicates that the company generates enough cash from its core business operations, which is crucial for stability and growth.

Historical Operating Cash Flow of Mosaic (MOS)

For 2023, Mosaic's Cash Flow from Operations (CFO) stands at $2,407.2 million, which is notably positive. This positive CFO score adds 1 point to the Piotroski F-Score for the company. Evaluating the historical data over the last 20 years, we observe a fluctuating yet generally upward trend in CFO values. In years like 2012 and 2022, Mosaic reported exceptionally high CFO values, hitting $2,705.8 million and $3,935.8 million respectively. Such figures signal robust operational performance and financial health for those periods. The current positive CFO is a positive indicator, reinforcing the company's capability to generate cash from its operations consistently. Therefore, this metric reflects well on Mosaic's operational efficiency and financial stance.

Return on Assets (ROA) are growing?

Return on Assets (ROA) measures a company's efficiency in generating profit relative to its total assets. It reveals how effectively a company is converting its investments into net earnings. A higher ROA indicates better managerial performance and asset utilization efficiency, making it crucial for financial assessment.

Historical change in Return on Assets (ROA) of Mosaic (MOS)

For Mosaic (MOS), the ROA decreased from 0.1578 in 2022 to 0.0502 in 2023. This change denotes a significant dip, representing the company's reduced efficiency in generating profit from its assets. Historically, MOS has displayed variability in its ROA, aligning with the industry's cyclical nature. Notably, in peak years such as 2022, when the ROA was substantially higher, Mosaic leveraged its assets more effectively. The industry's median ROA, averaging around 0.3092 in the last two decades, often serves as a benchmark. Compared to this, the decline in MOS's ROA highlights underperformance against historical trends. Thus, based on the Piotroski criterion, Mosaic's point for ROA remains at 0, signifying a negative trend.

Operating Cashflow are higher than Netincome?

This criterion measures whether operating cash flow is higher than net income to ensure quality of earnings. A higher operating cash flow compared to net income generally means that earnings are bolstered by real cash rather than accounting adjustments, reducing the risk of earnings manipulation or artificial inflation.

Historical accruals of Mosaic (MOS)

In 2023, the operating cash flow for Mosaic (MOS) was $2,407,200,000, which is indeed higher than the net income of $1,164,900,000. Therefore, MOS scores 1 point for this criterion. This positive indicator suggests that the company’s earnings are backed by substantial cash generation, thus reducing concerns about the quality of earnings. When looking at the historical data, MOS has shown varying levels of operating cash flow and net income. For instance, in 2022, the operating cash flow was an impressive $3,935,800,000, further underscoring strong earnings quality. However, there were also years such as 2019 when the company reported a net loss but still maintained a positive operating cash flow. Overall, this trend is a good signal for MOS's financial health, as consistent positive operating cash flows reinforce the reliability of its reported earnings.

Liquidity of Mosaic (MOS)

Leverage is declining?

Change in Leverage measures the degree to which a company uses borrowed money (debt) instead of equity to finance its operations. It is important as increased leverage may indicate higher financial risk.

Historical leverage of Mosaic (MOS)

The Leverage for Mosaic (MOS) increased from 0.1089 in 2022 to 0.1476 in 2023. This is a negative development since it indicates the company is taking on more debt relative to its equity, thus increasing its financial risk. Over the last 20 years, Mosaic's leverage has shown significant fluctuations, reaching as high as 0.2918 in 2004 and as low as 0.0599 in 2010. The current increase in leverage warrants close attention, particularly after the decrease observed in 2022.

Current Ratio is growing?

The criterion assesses the company's liquidity by comparing its ability to meet short-term obligations with its historical performance.

Historical Current Ratio of Mosaic (MOS)

Mosaic's Current Ratio saw a modest increase from 1.1848 in 2022 to 1.2249 in 2023. This indicates a slight improvement in the company's short-term financial health as it now has slightly better capability to cover its short-term liabilities with its short-term assets. Historically, the company had a much stronger current ratio, frequently above 2.0. However, its current ratio has been lagging behind the industry median for the last three years. An upward movement, albeit small, is a positive signal to investors focusing on liquidity metrics. The score for this criterion is 1.

Number of shares not diluted?

This criterion evaluates whether the number of outstanding shares has decreased from one year to the next. A decrease in shares outstanding is generally a positive signal, indicating higher earnings per share for existing shareholders.

Historical outstanding shares of Mosaic (MOS)

Comparing the Outstanding Shares, we see a reduction from 352.4 million shares in 2022 to 331.3 million shares in 2023. This signifies a decrease in outstanding shares, leading to a score of 1 for this criterion. The reduction in shares outstanding tends to be considered favorable as it can reflect share buybacks, potentially increasing the value for remaining shareholders. Analyzing the trend from the past 20 years shows fluctuations with a significant spike in shares in 2003, reaching a peak in 2008 at approximately 446.6 million shares. The recent decrease continues a bearish trend since 2018 when outstanding shares were 386.4 million. Thus, the decrease in 2023 is a positive move towards enhancing shareholder value.

Operating of Mosaic (MOS)

Cross Margin is growing?

The change in gross margin criterion assesses whether a company has been able to improve its profitability by looking at the difference in gross margin between two periods. An increase in gross margin indicates better cost control or pricing power, making it an important indicator of financial health.

Historical gross margin of Mosaic (MOS)

In 2023, Mosaic's (MOS) gross margin was 0.1614, a significant decrease from the 0.301 recorded in 2022. This decline in gross margin suggests that the company faced challenges either in cost control or pricing power. Over the last 20 years, Mosaic's gross margin has fluctuated, hitting highs of 0.3221 in 2008 and lows of 0.0827 in 2003. Comparatively, the industry's median gross margin in 2023 was 0.3092, which is notably higher than Mosaic's. This indicates that Mosaic not only experienced internal difficulties but also underperformed relative to its industry peers. Therefore, no point is awarded for this criterion (Score: 0).

Asset Turnover Ratio is growing?

Change in Asset Turnover measures how efficiently a company utilizes its assets for revenue generation. A higher Asset Turnover ratio indicates improved efficiency and management performance. By comparing the ratio year-over-year, investors can gauge changes in operational effectiveness.

Historical asset turnover ratio of Mosaic (MOS)

In 2023, Mosaic's (MOS) Asset Turnover ratio stood at 0.5901, a noticeable decline from 2022's ratio of 0.8421. This decrease signals less efficient use of assets in generating revenue, which is not favorable. Evaluating data over the past 20 years, we see fluctuations in the Asset Turnover ratio, with the peak in recent years being 2008 at 0.9353, and the lowest in 2017 at 0.4177. The declining trend from 2022 to 2023 reduces the score by 1 point, denoting a setback in operational efficiency for the company.


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