In this article, we discuss 10 fertilizer stocks to buy today.
The Russian invasion of Ukraine has resulted in global economic consequences, including the energy crisis, a shortage of agricultural commodities and inputs, broken global supply chains, and rampant inflation.
Fertilizer Market Outlook 2022
Amid Western sanctions and trade embargoes on Russia, which is one of the major global exporters of fertilizers, the prices for fertilizers have sharply risen over the last month. Since February 24, futures prices for urea fertilizers have increased 32%, while diammonium phosphate futures have soared 13%.
Western sanctions have also hit potash supplies from Belarus, a Russian ally, which is a key nutrient for crops of corn and soybeans, as well as fruits and vegetables. Similarly, a continued disruption in the global supply of nitrogen and potash could hinder crop yields in regions worldwide, which will result in food prices peaking even further in 2022 and 2023, even as they already sit above historical averages.
The war has significant ramifications for the U.S agriculture industry, since both Russia and Ukraine are important exporters of fertilizers and fertilizer inputs like natural gas, urea, and potash. Prices for fertilizers have climbed insanely since January owing to the war, but also due to unfeasible weather conditions, supply chain disruptions, and technical difficulties at plants. Additionally, 86% of the total potash in the United States is imported from Canada, and the Canadian Pacific Rail work stoppage will impact that supply as well.
In this uncertain macro environment, agribusinesses are set to thrive. Some of the top fertilizer stocks to buy today include The Andersons, Inc. (NASDAQ:ANDE), Nutrien Ltd. (NYSE:NTR), and The Mosaic Company (NYSE:MOS).
wk1003mike/Shutterstock.com
Our Methodology
We carefully assessed the fertilizer market, selecting companies that have benefited from the Russia-Ukraine war and which display strong business fundamentals. Most of the chosen stocks have received positive analyst ratings over the past few weeks.
We have also mentioned the hedge fund sentiment around the stocks, which was gauged from Insider Monkey’s fourth quarter database of 924 hedge funds that filed 13Fs for the December 2021 reporting period.
Fertilizer Stocks to Buy Today
10. Origin Agritech Limited (NASDAQ:SEED)
Number of Hedge Fund Holders: 1
Origin Agritech Limited (NASDAQ:SEED) is based in Beijing, China, and operates as an agricultural biotechnology company engaged in breeding seeds and genetic improvement activities. The company also markets agricultural inputs such as fertilizers and agricultural chemicals.
On February 7, the stock jumped 13.3% in premarket trading after the company announced a profitable outlook for 2022, as well as projected revenue growth of 300% to RMB 150 million in FY22. The expected growth will come from its existing hybrid seed operations and its newer initiative of selling crops enhanced via GMO and CRISPR technologies to feedstock companies.
The database of Insider Monkey shows that Paul Marshall and Ian Wace’s Marshall Wace LLP purchased 6,890 shares of Origin Agritech Limited (NASDAQ:SEED) in the fourth quarter of 2021, worth $49,000, becoming the only SEED shareholder in our database in the process.
In addition to The Andersons, Inc. (NASDAQ:ANDE), Nutrien Ltd. (NYSE:NTR), and The Mosaic Company (NYSE:MOS), Origin Agritech Limited (NASDAQ:SEED) is a notable fertilizer name to invest in.
9. Bioceres Crop Solutions Corp. (NASDAQ:BIOX)
Number of Hedge Fund Holders: 2
Bioceres Crop Solutions Corp. (NASDAQ:BIOX) was founded in 2001 and is headquartered in Rosario, Argentina. The company offers crop productivity solutions such as seed technology, germplasm, and seed treatments. The Crop Protection segment of Bioceres Crop Solutions Corp. (NASDAQ:BIOX) develops herbicides, insecticides, fungicides, and micro-granulated fertilizers.
On March 16, Bioceres Crop Solutions Corp. (NASDAQ:BIOX) announced its plan to merge with Marrone Bio Innovations, Inc. (NASDAQ:MBII) in an all-stock transaction. The transaction is valued at roughly $236 million and is expected to close in the third quarter of calendar 2022. Upon completion of the transaction, Marrone Bio Innovations, Inc. (NASDAQ:MBII) shareholders will own approximately 16 million Bioceres Crop Solutions Corp. (NASDAQ:BIOX) shares, and at least two directors will be appointed to Bioceres Crop Solutions Corp. (NASDAQ:BIOX)’s board of directors by shareholders of Marrone Bio Innovations, Inc. (NASDAQ:MBII).
Lake Street analyst Ben Klieve maintained a ‘Buy’ rating and $25 price target on Bioceres Crop Solutions Corp. (NASDAQ:BIOX) shares on March 18. He called the company’s acquisition of Marrone Bio Innovations, Inc. (NASDAQ:MBII) a “visionary acquisition made at a great price”.
According to Insider Monkey’s Q4 data, David Halpert’s Prince Street Capital Management is the leading shareholder of Bioceres Crop Solutions Corp. (NASDAQ:BIOX), with 127,000 shares worth $1.7 million.
8. Compass Minerals International, Inc. (NYSE:CMP)
Number of Hedge Fund Holders: 12
Compass Minerals International, Inc. (NYSE:CMP) is a Kansas-based provider of minerals such as salt, magnesium chloride, sulfate of potash, and related plant nutrition products. Compass Minerals International, Inc. (NYSE:CMP) is one of the leading suppliers of sulfate of potash specialty fertilizer in the Western Hemisphere. Amid a macro backdrop filled with global food shortages, Compass Minerals International, Inc. (NYSE:CMP) shares gained 11% in the last month.
On February 24, Compass Minerals International, Inc. (NYSE:CMP) declared a $0.15 per share quarterly dividend, which was paid on March 21 to shareholders of record on March 10.
CL King analyst David Silver raised his price target on Compass Minerals International, Inc. (NYSE:CMP) to $67 from $65 and assigned a ‘Buy’ rating to the shares on March 3. According to the analyst, the company’s valuation is increasingly sensitive to the future potential of its identified lithium resource and smaller growth plans. Compass Minerals International, Inc. (NYSE:CMP) is also implementing efficiency improvements at its Goderich salt mine, Silver told investors in a research note.
In the fourth quarter of 2021, 12 hedge funds held long positions in Compass Minerals International, Inc. (NYSE:CMP), compared to 14 funds in the prior quarter. Jeffrey Bronchick’s Cove Street Capital is the biggest shareholder of the company among that group, with 587,618 shares worth $30 million.
Here is what Bernzott Capital Advisors US Small Cap Value had to say about Compass Minerals International, Inc. (NYSE:CMP) in its Q4 2021 investor letter:
“Compass Minerals (CMP): The salt and plant nutrient producer reported earnings below expectations due to unfavorable weather conditions combined with higher operating costs. Additionally, the company announced a reduction in its quarterly dividend as they refocus capital on growing battery grade Lithium assets. Despite the disappointing results, we continue to view this stock as attractive based on its asset base, strong cash flow characteristics and the potential opportunity to unlock value with the Lithium assets.”
7. The Andersons, Inc. (NASDAQ:ANDE)
Number of Hedge Fund Holders: 15
The Andersons, Inc. (NASDAQ:ANDE) is based in Maumee, Ohio, and supplies plant nutrient products including fertilizers, as well as weed and pest control solutions. The agribusiness also provides a variety of grains. The Andersons, Inc. (NASDAQ:ANDE) stock has climbed 19.15% in the past month, in light of the Ukraine war causing a global shortage in the agriculture market.
On February 15, The Andersons, Inc. (NASDAQ:ANDE) published its fourth quarter earnings and revenue, both of which came in above the market consensus. The company attributed the strong Q4 results to a good harvest in 2021, as well as good operational and commercial decisions in its new growth markets that added to its profits.
Lake Street analyst Ben Klieve reiterated a ‘Buy’ rating on the stock and raised his price target on The Andersons, Inc. (NASDAQ:ANDE) to $50 from $45. He attributed the higher price target to the “record” Q4 results, which also led the analyst to raise his FY22 and FY23 estimates. In the current agriculture market, The Andersons, Inc. (NASDAQ:ANDE) has “far more sources of profit generation than the market appreciated in yesterday’s response”, the analyst told investors in a bullish thesis.
Arrowstreet Capital is the biggest shareholder of the company according to the Q4 database of Insider Monkey, with 362,928 shares worth $14 million. Overall, 15 hedge funds were bullish on the stock at the end of December 2021.
6. FMC Corporation (NYSE:FMC)
Number of Hedge Fund Holders: 27
Headquartered in Philadelphia, Pennsylvania, FMC Corporation (NYSE:FMC) is an agricultural sciences company that has a product portfolio focused on crop protection and plant health. It develops and markets insecticides, herbicides, and fungicides; as well as seed treatment solutions to boost crop yield.
FMC Corporation (NYSE:FMC) declared a $0.53 per share quarterly dividend on February 25, which equates to a forward yield of 1.8% at current share prices. The dividend is payable on April 21, for shareholders of record on March 31.
On March 22, Citi analyst P.J. Juvekar raised the firm’s price target on FMC Corporation (NYSE:FMC) to $152 from $137, and maintained a ‘Buy’ rating on the stock. Despite recent underperformance, the company is positioned to benefit from its low valuation, recently cash-rich farmers who can afford to invest in enhanced crop yields, and rising demand for sustainable crop protection solutions. The stock has gained close to 13% in the last month.
In its Q4 earnings report, published on February 8, FMC Corporation (NYSE:FMC) posted EPS of $2.16, exceeding market estimates by $0.15. Its $1.41 billion in revenue represented a 22.69% jump compared to the prior-year quarter and topped consensus by $47.32 million.
According to Insider Monkey’s Q4 data, 27 hedge funds reported owning stakes in FMC Corporation (NYSE:FMC), valued at $452.2 million, compared to 28 funds the previous quarter with positions worth roughly $350 million. Amy Minella’s Cardinal Capital is the leading shareholder of the company as per our database, with 976,795 shares worth $107.3 million.
Elite hedge funds are pouring into FMC Corporation (NYSE:FMC), just like The Andersons, Inc. (NASDAQ:ANDE), Nutrien Ltd. (NYSE:NTR), and The Mosaic Company (NYSE:MOS).
Here is what Tweedy, Browne Company had to say about FMC Corporation (NYSE:FMC) in its Q3 2021 investor letter:
“FMC Corp. provides crop chemicals for the agriculture industry. Crop chemicals protect farmers’ fields from insects, fungus, and weeds, which allows them to increase their crop yields. As a result, farmers are more than willing to pay a price premium for effective products. Similar to pharmaceutical companies, crop protection products also are often “patented,” which gives them pricing power. In addition, the development time and investment, combined with navigating the regulatory process in a variety of jurisdictions, and then achieving distribution at scale, provide immense barriers to entry in the industry. Small companies may be able to conduct research on active ingredients, but it will be difficult for them to “commercialize” them. Given all of this, FMC has enjoyed a high return on capital and has been a very profitable business, earning a 27% EBITDA margin and a 25% ROE including goodwill for the year 2020.
FMC is diversified geographically and by crop, which should serve to make it a less cyclical business. It also has, in our view, a very good new product pipeline, and aims to grow its revenues at 5% to 7% annually through 2023, and its EBITDA at 7% to 9% annually through 2023. The company also has had some insider purchases recently from both its CEO and CFO…” (Click here to see the full text)
5. K+S Aktiengesellschaft (OTC:KPLUY)
Number of Hedge Fund Holders: N/A
K+S Aktiengesellschaft (OTC:KPLUY) is a German company that supplies mineral products to the agricultural, industrial, and consumer applications industries. The company offers potassium chloride for crops such as corn, rice, and soybeans; as well as fertilizer specialties that are used for rapeseed or potatoes, and other chloride-sensitive crops.
Baader Helvea analyst Markus Mayer upgraded K+S Aktiengesellschaft (OTC:KPLUY) to ‘Buy’ from ‘Add’ on March 15, with a €30 price target.
Amid the Russia-Ukraine war, fertilizer and agriculture stocks have soared as worries over global food shortages took hold, and K+S Aktiengesellschaft (OTC:KPLUY) has been one of the significant gainers. The stock climbed approximately 32% in the last month. On March 10, K+S Aktiengesellschaft (OTC:KPLUY) reported FY non-GAAP EPS of €11.61. The company’s revenue increased 33.3% year-over-year to €3.2B.
4. Nutrien Ltd. (NYSE:NTR)
Number of Hedge Fund Holders: 36
Nutrien Ltd. (NYSE:NTR) is a Canadian company that supplies potash, nitrogen, phosphate, and sulfate products for crop protection. Nutrien Ltd. (NYSE:NTR) has been one of the top agribusiness gainers amid the Russia-Ukraine war, climbing roughly 38% in the last month.
On March 22, Citi analyst P.J. Juvekar raised the price target on Nutrien Ltd. (NYSE:NTR) to $126 from $89 and kept a ‘Buy’ rating on the shares. According to the analyst, the war in Ukraine has caused fertilizer prices to soar, given supply concerns in already tight markets. He increased base-case estimates on fertilizer names to account for the continuously high price dynamics.
Nutrien Ltd. (NYSE:NTR) declared a quarterly dividend of $0.48 per share on February 16, a 4.3% increase from its prior dividend of $0.46. The dividend is payable on April 14, for shareholders of record on March 31.
The Q4 database of Insider Monkey reveals that 36 hedge funds were bullish on Nutrien Ltd. (NYSE:NTR), up from 30 funds in the earlier quarter. First Eagle Investment Management is the biggest shareholder of Nutrien Ltd. (NYSE:NTR), owning 11.3 million shares worth $853.2 million.
Here is what Miller/Howard Investments had to say about Nutrien Ltd. (NYSE:NTR) in its Q1 2021 investor letter:
“For the most part, performance of the stocks within the Income-Equity Strategies was skewed towards the high-performing market sectors with two exceptions – our consumer discretionary and technology stocks both did better than their broad market peers… We bought Nutrien (NTR), a producer of fertilizer, which we believe should benefit from increasing crop prices.”
3. The Mosaic Company (NYSE:MOS)
Number of Hedge Fund Holders: 46
The Mosaic Company (NYSE:MOS) is a Florida-based company that develops and sells phosphate and potash crop nutrients and fertilizers across North America and international markets. The Mosaic Company (NYSE:MOS) has benefited greatly from the Russian war on Ukraine, as the stock has gained almost 47% in the last month.
On March 22, The Mosaic Company (NYSE:MOS) disclosed Phosphates revenue for January and February of $873 million, up 37.7% year-over-year, Potash revenue of $604 million, up 104.8% year-over-year, and Mosaic Fertilizantes revenue of $870 million, up 66.4% compared to the same period last year. The sales volumes declined as shipments were impacted by rail delays in Canada and Florida.
The Mosaic Company (NYSE:MOS) declared an $0.1125 per share quarterly dividend on December 17, a 50% increase from its prior dividend of $0.075. The dividend was distributed on March 17.
Goldman Sachs analyst Adam Samuelson upgraded The Mosaic Company (NYSE:MOS) to ‘Buy’ from ‘Neutral’ on March 15, with an $83 price target. According to the analyst, the Russia/Ukraine conflict has the potential to be one of the most disruptive events across the food and agricultural supply chain in decades, and he believes The Mosaic Company (NYSE:MOS) will be a beneficiary in the current environment.
Soroban Capital Partners is a significant shareholder of the company, with 4.3 million shares worth $172.70 million. Overall, 46 hedge funds were bullish on The Mosaic Company (NYSE:MOS) at the end of the fourth quarter.
Here is what Ariel Focus Fund had to say about The Mosaic Company (NYSE:MOS) in its Q3 2021 investor letter:
“Our third quarter contributors generally fit this “happy family” description. Mosaic Company is the largest contributor to performance this year as well as our biggest holding as we go to print. The company returned +12.20% in the quarter and +56.16% so far this year. We have long believed Mosaic is well positioned to help the world feed its 7 billion people with a better diet amid finite agricultural resources. The company’s nutrients, particularly phosphates and potash, are key to improving yields on the limited number of global acres devoted to farming. Mosaic believes up to 60% of the yield on many crops is determined by the appropriate application of nutrients. For this reason, the company has remained focused on expanding its leadership position in this core fertilizer business. For several years, this concentrated effort did not show results. But in 2021, Mosaic’s focus began to pay off. Strong U.S. crop prices as well as growing transportation costs for imported fertilizer from overseas mines have led to improved earnings expectations. Last December, analysts showed a mean estimate for Mosaic 2021 EPS of $1.43. Today, those same analysts expect the company to earn $4.67! Estimates for 2022 EPS have also increased dramatically from $2.10 as of December 2020 to $4.99 today. We believe Mosaic will also continue to benefit from global inflation.”
2. Corteva, Inc. (NYSE:CTVA)
Number of Hedge Fund Holders: 42
Corteva, Inc. (NYSE:CTVA) was incorporated in 2018 and is headquartered in Indianapolis, Indiana, providing herbicides, insecticides, and nitrogen stabilizers. The company’s seed and crop protection products seek to optimize yields for farmers.
Mizuho analyst Christopher Parkinson raised the firm’s price target on Corteva, Inc. (NYSE:CTVA) to $60 from $55 on February 4 and kept a ‘Buy’ rating on the shares. The analyst remained “bullish on the CTVA story.”
Corteva, Inc. (NYSE:CTVA) published its Q4 results on February 2, reporting GAAP earnings per share of $0.22, topping market estimates by $0.20, while its $3.48 billion in revenue outperformed analysts’ predictions by roughly $30 million.
Among the hedge funds tracked by Insider Monkey, 42 funds reported owning stakes in Corteva, Inc. (NYSE:CTVA) as of December 31, compared to 41 funds in the prior quarter. Jeffrey Smith’s Starboard Value LP is the largest shareholder of Corteva, Inc. (NYSE:CTVA), with 8.90 million shares worth approximately $421 million.
Here is what Rhizome Partners had to say about Corteva, Inc. (NYSE:CTVA) in its Q1 2021 investor letter:
“We are still getting used to the higher multiples that investors will pay for larger market cap and pure play companies such as Corteva. We do understand the market’s rationale. For example, Corteva operates in a duopoly with Monsanto, owned by Bayer AG, that provides genetically modified seeds and pesticides. With some operating leverage, the company can probably grow FCF at 4-6% a year. This brings the total return close to the long-term return of the S&P 500 index of 10%. Through trial and error, we have come to appreciate how scale, higher market share, route densities, switching costs, and collaborative relationships amongst major industry players can contribute to sustained high returns on invested capital.”
1. CF Industries Holdings, Inc. (NYSE:CF)
Number of Hedge Fund Holders: 58
CF Industries Holdings, Inc. (NYSE:CF) is an Illinois-based company that supplies hydrogen and nitrogen products for energy, fertilizers, emissions control, and similar industrial applications worldwide. Amid the current macro backdrop, CF Industries Holdings, Inc. (NYSE:CF) has gained over 35% in the last month.
On March 22, analyst P.J. Juvekar from Citi raised the firm’s price target on CF Industries Holdings, Inc. (NYSE:CF) to $121 from $86 and kept a ‘Buy’ rating on the shares, citing the Russia-Ukraine conflict that has caused fertilizer prices to spike on supply chain challenges.
According to the fourth quarter database of Insider Monkey, 58 funds were bullish on CF Industries Holdings, Inc. (NYSE:CF), up from 49 funds in the prior quarter. Amid the flurry of hedge fund activity around CF Industries Holdings, Inc. (NYSE:CF), Matthew Barrett’s Glendon Capital Management is the biggest shareholder of the company, with more than 5 million shares worth $363.3 million.
You can also take a look at 10 Best Crude Oil Stocks To Buy Today and 10 Best Vanguard ETFs to Invest In.
Follow Insider Monkey on Twitter
Suggested articles:
- 10 Undervalued Defense and Military Stocks to Buy Now
- 10 Undervalued Small-Cap Stocks to Buy Now
- 9 Best Clean Energy Stocks To Buy Today
Disclosure: None. 10 Fertilizer Stocks to Buy Today is originally published on Insider Monkey.
