Earnings trends are extremely important when evaluating stocks. At Wall St. Cheat Sheet, we view increasing earnings quarter-over-quarter as a simple way to gauge whether costs and the business model are stable. Then we like to analyze whether the company is outperforming peers in the sector. This is what we call the “E-Squared” investment analysis (‘E = Earnings Are Increasing Quarter-Over-Quarter’ + ‘E = Excellent Relative Performance Versus Peers and Sector’).
Stocks with improving earnings metrics are worthy of your extra attention. Click here to discover our CHEAT SHEET stock picks now!
Here’s your Cheat Sheet to how the top 4 fertilizer stocks rank via earnings trends:
4) The Mosaic Company (NYSE:MOS)
| Fiscal Year | 2008 | 2009 | 2010 | 2011 | 2012 |
| Revenue ($) in millions | 9,813 | 10,300 | 6,759 | 9,938 | 11,110 |
| Diluted EPS ($) | 4.67 | 5.27 | 1.85 | 5.62 | 4.42 |
When looking at Mosaic’s earnings in the big picture, we see an up-down-up trend. During that time, the stock has been volatile yet remained fairly stable through 2012.
Next, our CHEAT SHEET investing framework asks us to drill down to the recent quarterly data:
| Quarter | Nov. 30, 2011 | Feb. 29, 2012 | May. 31, 2012 | Aug. 31, 2012 | Nov. 30, 2012 |
| Revenue ($) in millions | 3,014 | 2,190 | 2,820 | 2,505 | 2,536 |
| Diluted EPS ($) | 1.40 | 0.64 | 1.21 | 1.01 | 1.47 |
From this vantage point, Mosaic is erratic and higher risk. Earnings per share have been all over the place lately, and barely up quarter-over-quarter. We prefer to see earnings strongly increasing quarter-over-quarter as a simple way to gauge whether costs and the business model are stable. In this case, Mosaic doesn’t pass our test at the moment. The following stocks have been stronger…
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