1. MATERIALS COMPANIES
Tyler Hone
Jian Huang

2. Agenda Sector Overview Stock Recommendations Mosaic Crown Potash
SIM Weight Recommendations
Q&A

3. OVERVIEW
- Currently in-line relative to S&P 500

4. OVERVIEW
Source:
Source:

5. STOCK RECOMMENDATIONS
Current Price
Target Price
Upside/Downside
SIM Weights
Proposed SIM Weights
Recommendation
Mosaic (MOS)
$24.18
$31.80
31.53%
1.26%
1.50%
HOLD/BUY
Crown (CCK)
$59.19
$60.87
2.8%
1.59%
HOLD
Potash Corp (POT)
$17.99
$21.57
19.88%
0.00% 0%
Increase Mosaic weight by 0.24%, increasing the overall Materials weight to 3.09%
Overweight compared to the S&P 500

6. MOSAIC Co. Company Overview:
- A world leader in production and sale of phosphate and potash crop nutrients
- Employ nearly 9000 people in 6 countries
- Largest Phosphate producer
- Sell to 40+ countries
Segments:
- Potash
- Phosphate
- International Distribution

7. MOSAIC Co. Pros: - Global operations and expansion
- Recent acquisitions of CF Industries, Inc (phosphate) and Archer Daniels Midland company’s fertilizer distribution in Brazil and Paraguay (2014)
Cons:
- Increased Supply, Decrease in demand
- Raw Material prices and economic environment
- Government regulation
- Potential Merger between Potash (POT) and Agrium (AGU) called Nutrien

8. MOSAIC Co.
COMPETITOR COMPARISON

9. MOSAIC Co. VALUATION: - Terminal Discount Rate = 11%
- Terminal Growth Rate = 3%
- Target Price = $31.80 ($33.00 Morningstar)
- Upside = 31.53%

10. MOSAIC Co.

11. CROWN Company Overview - Company operated 146 plants in 36 countries
Approximately 24,000 employees.
Found in 1892
Make metal beverage and food cans, metal aerosol containers, metal closures and specialty packing.
Segments
- Americas Beverage
- North America Food
- European Beverage
- European Food
- Asia Pacific Division

12. CROWN Pros - Steady operation margin growth
- Revolutionary technologies for Cans
- Defensive stock price
- Increasing demand in developing countries
Cons
- The Company's international operations generated approximately 77% of sales
- Raw Material prices and economic environment
- Government regulation

13. CROWN
Operation margin

14. CROWN
COMPETITOR COMPARISON

15. CROWN VALUATION: - Terminal Discount Rate = 11%
- Terminal Growth Rate = 3.0%
- Target Price = $60.87 (Range $58.05-$64.03)
- Upside = 4.5%
Crown sensitivity analysis

16. CROWN

17. POTASH Company Overview:
- World leader in fertilizer by capacity, producing Potash, Nitrogen, and Phosphate
- Canadian potash is primary operation, represent more than 1/5 of global capacity
- Investments in potash-related businesses in South America, the Middle East, and Asia
- Operations and business in 7 countries

18. COMPETITOR COMPARISON
POTASH
COMPETITOR COMPARISON

19. POTASH

20. SIM RECOMMENDATIONS FINAL RECOMMENDATIONS Stock Current Price
Target Price
Upside/Downside
SIM Weights
Proposed SIM Weights
Recommendation
Mosaic (MOS)
$24.18
$31.80
31.53%
1.26%
1.50%
HOLD/BUY
Crown (CCK)
$59.19
$60.87
2.8%
1.59%
HOLD
Potash Corp (POT)
$17.99
$21.57
19.88%
0.00% 0%
Increase Mosaic weight by 0.24%, increasing the overall Materials weight to 3.09%
Overweight compared to the S&P

21. Q&A