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Is MOS a good stock to buy? We came across a bearish thesis on The Mosaic Company on RM Trade Co.’s Substack. In this article, we will summarize the bears’ thesis on MOS. The Mosaic Company's share was trading at $24.20 as of April 21st. MOS’s trailing and forward P/E were 14.18 and 14.27 respectively according to Yahoo Finance.
The Mosaic Company, through its subsidiaries, produces and markets concentrated phosphate and potash crop nutrients. MOS is positioned as a high-conviction short/put idea driven by a clearly quantifiable near-term cost shock rather than a structural demand collapse. Management has already disclosed a $250 million Q1 2026 EBITDA headwind from elevated sulfur costs, a figure that was guided prior to the additional pressure from the Hormuz blockade, highlighting the potential for further downside revisions.
In response to worsening input economics, the company has already begun defensive measures including idling Brazilian operations and halting sulfur purchases, signaling that margin pressure is becoming operationally binding. Despite these headwinds, consensus remains anchored at Buy with a $33.60 price target, suggesting positioning is still crowded on the long side and vulnerable to downgrades ahead of the next earnings date around May 6. The proposed structure is a June 2026 $27/$22 bear put spread designed to capture a gradual compression in phosphate margins as input costs reprice through the system.
Importantly, this is not a clean revenue destruction story, as Mosaic retains partial pricing power in phosphate fertilizers, with DAP prices around $700–750 per ton FOB potentially offsetting some of the sulfur cost inflation. However, the central thesis hinges on the timing mismatch between rising sulfuric acid costs and the company’s ability to pass them through, making this primarily a margin compression trade rather than a demand-driven downturn.
Near-term volatility risk is already visible, with fertilizer stocks initially rallying on Hormuz-related news, including MOS up 3.1% on expectations of higher fertilizer prices. The key monitoring factor is the lag in cost pass-through versus input inflation, which will determine whether margins stabilize or compress further into earnings revisions.
Previously, we covered bullish thesis on Corteva, Inc. (CTVA) by Business Model Mastery in May 2025, which highlighted its intellectual property moat, biologicals growth, and digital platform. CTVA's stock price has appreciated by approximately 30.01% since our coverage. RM Trade shares contrarian view but emphasizes margin compression in Mosaic driven by sulfur cost shocks and timing mismatch in pass-through.
The Mosaic Company is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 54 hedge fund portfolios held MOS at the end of the fourth quarter which was 47 in the previous quarter. While we acknowledge the risk and potential of MOS as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MOS and that has 10,000% upside potential, check out our report about this cheapest AI stock.