9 Best Fertilizer Stocks to Buy According to Hedge Funds

In this article, we discuss 9 best fertilizer stocks to buy according to hedge funds.

As per Vantage Market Research in a report dated July 27, the global fertilizer market will experience growth in the future given the sudden changes in crop prices, higher global nutrient demand, and the unexpected surge in energy prices. In addition to that, demand for food will multiply, driven by a growing population and this will potentially advance the growth of the fertilizer market in the years to come. 

Vantage Market Research expects the global fertilizer market to reach $219.4 billion by 2028 and is forecasted to exhibit a compound annual growth rate of 2.3% during the forecast period. In 2021, the global fertilizer market was worth approximately $191.5 billion. On the basis of region, the Asia Pacific is anticipated to dominate the worldwide fertilizer market.

Russia is the world’s largest supplier of fertilizers and their primary components. It accounts for approximately 45% of the global ammonia nitrate market, 18% of the potash market, and 14% of global phosphate fertilizer exports. The Russia supply shock will inflate fertilizer and chemical prices further, given that the West and Europe are trying to cut reliance on the country. This will create upside for fertilizer firms like Nutrien Ltd. (NYSE:NTR), Corteva, Inc. (NYSE:CTVA), and The Mosaic Company (NYSE:MOS). 

Our Methodology 

We selected the fertilizer stocks that are most popular amongst elite hedge funds. We have mentioned the analyst ratings, business fundamentals, and future growth prospects for each firm. We have assessed the hedge fund sentiment from Insider Monkey’s database of 920 elite hedge funds tracked as of the end of the third quarter of 2022. 

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Best Fertilizer Stocks to Buy According to Hedge Funds

9. Bioceres Crop Solutions Corp. (NASDAQ:BIOX)

Number of Hedge Fund Holders: 5

Bioceres Crop Solutions Corp. (NASDAQ:BIOX) was founded in 2001 and is headquartered in Rosario, Argentina. The company specializes in crop productivity solutions. It operates through three segments – Seed and Integrated Products, Crop Protection, and Crop Nutrition. The Crop Nutrition segment develops, commercializes, and sells inoculants, bio-inductors, biological, and micro-granulated fertilizers. The company operates in Argentina, Bolivia, Brazil, the United States, Paraguay, South Africa, France, Uruguay, and internationally.

On November 10, Bioceres Crop Solutions Corp. (NASDAQ:BIOX) reported a Q1 adjusted EBITDA of $24.5 million, approximately doubling last year’s quarterly result, representing resilient top-line and gross profit growth. The revenue of $127.1 million climbed 70.6% year-over-year, topping Wall Street estimates by $45.11 million. The revenue growth was supported by ongoing outstanding performance in micro-beaded fertilizers, in addition to inoculants, adjuvants, and third-party products.

Lake Street analyst Ben Klieve on November 11 raised the price target on Bioceres Crop Solutions Corp. (NASDAQ:BIOX) to $30 from $25 and maintained a Buy rating on the shares after the company posted “its best quarter in corporate history.” While he thinks some of the earnings beat was driven by the usual seasonal peak in Q2, the analyst still contended that Bioceres Crop Solutions Corp. (NASDAQ:BIOX) “remains an exceptionally well-positioned AgTech company with strong commercial tailwinds.”

According to Insider Monkey’s data, 5 hedge funds were long Bioceres Crop Solutions Corp. (NASDAQ:BIOX) at the end of Q2 2022, with collective stakes worth $86.2 million, compared to 4 funds in the prior quarter worth $66.15 million. Craig Peskin and Peter Fleiss’ Solel Partners is the largest stakeholder of the company, with 4.5 million shares worth $59.6 million. 

Like Nutrien Ltd. (NYSE:NTR), Corteva, Inc. (NYSE:CTVA), and The Mosaic Company (NYSE:MOS), Bioceres Crop Solutions Corp. (NASDAQ:BIOX) is one of the best fertilizer stocks to invest in. 

8. The Andersons, Inc. (NASDAQ:ANDE)

Number of Hedge Fund Holders: 16

The Andersons, Inc. (NASDAQ:ANDE) was founded in 1947 and is based in Maumee, Ohio. It is an agriculture company that operates through Trade, Renewables, and Plant Nutrient segments in the United States and internationally. The Plant Nutrient segment provides fertilizers and pest control products. The Andersons, Inc. (NASDAQ:ANDE) is one of the best fertilizer stocks to invest in. 

On November 1, The Andersons, Inc. (NASDAQ:ANDE) reported its Q3 results, posting non-GAAP earnings per share of $0.50 and a revenue of $4.22 billion, outperforming Wall Street consensus by $0.13 and $910 million, respectively. The revenue climbed 40.7% on a year-over-year basis. 

The Andersons, Inc. (NASDAQ:ANDE) announced on November 1 the acquisition of Bridge Agri Partners, which provides ingredients to the pet food industry. This deal advances The Andersons, Inc. (NASDAQ:ANDE)’s pet food ingredient portfolio and market presence in the central northern region of the United States and Canada. Bridge Agri will operate as a wholly owned subsidiary of The Andersons, Inc. (NASDAQ:ANDE). 

According to the third quarter database of Insider Monkey, 16 hedge funds held stakes worth $34.5 million in The Andersons, Inc. (NASDAQ:ANDE), compared to 15 funds in the prior quarter worth $39.5 million. George Mccabe’s Portolan Capital Management is the largest stakeholder of the company, with 264,745 shares worth $8.2 million. 

7. Compass Minerals International, Inc. (NYSE:CMP)

Number of Hedge Fund Holders: 20

Compass Minerals International, Inc. (NYSE:CMP) is a Kansas-based company that produces and commercializes essential minerals in the United States, Canada, Brazil, the United Kingdom, and internationally. It operates through three segments – Salt, Plant Nutrition North America, and Plant Nutrition South America. The Plant Nutrition North America segment provides sulfate of potash specialty fertilizers in various grades. 

On November 10, Compass Minerals International, Inc. (NYSE:CMP) signed a multi-year supply agreement with lithium-ion batteries maker LG Energy Solution. Compass Minerals International, Inc. (NYSE:CMP) will provide LG Energy battery-grade lithium carbonate and will deliver up to 40% of its planned, phase-one battery-grade lithium carbonate production to LG for a 6-year term. Once completely operational, Compass Minerals International, Inc. (NYSE:CMP) forecasts an annual commercial production capacity of nearly 35 kMT lithium carbonate equivalent, with an initial phase-one capacity of 11 kMT coming online by 2025.

Compass Minerals International, Inc. (NYSE:CMP) on November 15 declared a $0.15 per share quarterly dividend, in line with previous. The dividend is distributable on December 20, to shareholders of the company as of December 9.

According to Insider Monkey’s data, 20 hedge funds were long Compass Minerals International, Inc. (NYSE:CMP) at the end of Q3 2022, compared to 17 funds in the last quarter. The collective stakes held by elite funds in Q3 increased to $139.5 million from $63 million in Q2 2022. Select Equity Group is the biggest position holder in the company, with 891,967 shares worth $34.3 million. 

Here is what Bernzott Capital Advisors specifically said about Compass Minerals International, Inc. (NYSE:CMP) in its Q2 2022 investor letter:

“Compass Minerals International, Inc. (NYSE:CMP): Despite a strong winter season in which salt volumes came in higher than expectations buoyed by a more normalized snowfall year, higher logistics and freight costs negatively impacted the bottom line. Within their plant nutrient segment, margins remained strong driven by strong potash pricing, however drought conditions negatively impacted overall volumes. Looking ahead, CMP should benefit from improved pricing during the upcoming salt selling season while actions taken within their plant segment to improve efficiencies should help improve overall results. Finally, the company is making progress in the development of its Lithium assets, supported by a recent offtake agreement with a leading global manufacturer of lithium-ion batteries which we believe is not reflected in the current stock price.”

6. FMC Corporation (NYSE:FMC)

Number of Hedge Fund Holders: 28

FMC Corporation (NYSE:FMC) was founded in 1883 and is headquartered in Philadelphia, Pennsylvania. It is an agricultural sciences company that offers crop protection, plant health, pest control, and turf management products. It is one of the best fertilizer stocks to monitor. 

On November 1, FMC Corporation (NYSE:FMC) reported a Q3 non-GAAP EPS of $1.23 and a revenue of $1.38 billion, outperforming market estimates by $0.12 and $50 million, respectively. For full-year 2022, the company raised its revenue outlook to $5.6 billion-$5.8 billion, reflecting 13% growth at the midpoint versus 2021. This is up from the prior outlook of $5.5 billion-$5.7 billion, whereas the revenue consensus stood at $5.63 billion.  

Loop Capital analyst Christopher Kapsch on November 15 upgraded FMC Corporation (NYSE:FMC) to Buy from Hold with a price target of $149, up from $132. The previous downgrade was due to his belief that the stock’s valuation had gotten ahead of the story, but FMC Corporation (NYSE:FMC) has executed nicely, which has de-risked its earnings progression, the analyst told investors. He added that he now sees higher upside in FMC shares, particularly given the potential to close a valuation gap compared to Corteva, Inc. (NYSE:CTVA). 

According to Insider Monkey’s data, 28 hedge funds were bullish on FMC Corporation (NYSE:FMC) at the end of the third quarter of 2022, compared to 29 funds in the preceding quarter. Ken Griffin’s Citadel Investment Group is the leading stakeholder of the company, with 1.2 million shares worth $130 million. 

In addition to Nutrien Ltd. (NYSE:NTR), Corteva, Inc. (NYSE:CTVA), and The Mosaic Company (NYSE:MOS), FMC Corporation (NYSE:FMC) is one of the fertilizer stocks backed by elite hedge funds. 

Here is what Miller Value Partners Deep Value Strategy has to say about FMC Corporation (NYSE:FMC) in its Q2 2022 investor letter:

“We also believe that a lot of Energy equities remain mispriced. The sector generated negative returns in four of the last six years (2015, 2017, 2018, and 2020). Even with a strong 2021 and start to 2022, the Energy sector 10-year returns at the end of the 2nd quarter are only 4.3% versus 18.7% for Technology and 13% for the overall S&P 500. Our two energy holdings – Nabors Industries (NYSE:NBR) and TechnipFMC (NYSE:FMC) – are oil service companies that recently experienced multi-year trough conditions. Given the delayed industry Capital Expenditure (“capex”) recovery, both companies have only recently seen higher utilization rates, improved pricing, higher margins, and growing backlogs. It is also important to note that their revenue isn’t directly tied to a commodity price but to industry capital spending trends. Both management teams see a multi-year positive industry capex cycle with oil prices greater than $70/share. Nabors and TechnipFMC share prices are still 75% below their 5-year highs, at low single-digit cash flow multiples, and normalized free cash flow yields in excess of 30%. Both companies have significant price-to-value gaps that offer the potential to generate very positive long-term returns.”

5. Sociedad Química y Minera de Chile S.A. (NYSE:SQM)

Number of Hedge Fund Holders: 34

Sociedad Química y Minera de Chile S.A. (NYSE:SQM) is headquartered in Santiago, Chile, and the company produces and sells specialty plant nutrients, iodine and its derivatives, lithium and its derivatives, potassium chloride and sulfate, and industrial chemicals. Sociedad Química y Minera de Chile S.A. (NYSE:SQM) is one of the premier fertilizer stocks to invest in. 

On November 18, Deutsche Bank analyst Corinne Blanchard maintained a Buy recommendation on Sociedad Química y Minera de Chile S.A. (NYSE:SQM) but trimmed the price target on the shares to $125 from $128. The post-earnings selloff is an “overreaction” due to macro concerns as Sociedad Química y Minera de Chile S.A. (NYSE:SQM) reported a strong quarter, the analyst told investors. The selloff was potentially triggered by macro fears, with investors worried about lithium spot prices and softer electric vehicle demand in China, added the analyst. On pricing, he believes the market concerns are unjustified.

According to Insider Monkey’s Q3 data, 34 hedge funds were bullish on Sociedad Química y Minera de Chile S.A. (NYSE:SQM), compared to 29 funds in the prior quarter. Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital is the largest stakeholder of the company, with 1.3 million shares worth $125.2 million. 

Here is what ClearBridge Investments has to say about Sociedad Química y Minera de Chile S.A. (NYSE:SQM) in its Q1 2021 investor letter:

“Among materials names in our structural bucket, we sold SQM as the stock hit our price target. Lithium prices remain at levels well below previous highs and while we expect they may reach higher levels in the future; high pricing likely encourages additional supply onto the market.”

4. The Mosaic Company (NYSE:MOS)

Number of Hedge Fund Holders: 46

The Mosaic Company (NYSE:MOS) is a Florida-based company that produces and sells concentrated phosphate and potash crop nutrients in North America and internationally. The company operates through three segments – Phosphates, Potash, and Mosaic Fertilizantes. It is one of the best fertilizer stocks to consider. 

On October 19, The Mosaic Company (NYSE:MOS) declared a quarterly dividend of $0.15 per share, in line with previous. The dividend is payable on December 15, to shareholders of record on December 1. The Mosaic Company (NYSE:MOS)’s dividend yield on November 21 came in at 1.23%.

JPMorgan analyst Jeffrey Zekauskas on November 9 reiterated an Overweight rating on The Mosaic Company (NYSE:MOS) but trimmed the price target on the shares to $73 from $75 following the Q3 results. The Mosaic Company (NYSE:MOS)’s “sizeable” cash flow is being directed to its shareholders, and the company anticipates to meet its target leverage in November with the pay down of a $550 million debt tranche, the analyst wrote in a research note.

According to the third quarter database of Insider Monkey, 46 hedge funds were bullish on The Mosaic Company (NYSE:MOS), compared to 50 funds in the earlier quarter. Eric W. Mandelblatt’s Soroban Capital Partners held the leading stake in the company, consisting of 6.8 million shares worth $332 million. 

Here is what Carillon Tower Advisers specifically said about The Mosaic Company (NYSE:MOS) in its Q2 2022 investor letter:

“The Mosaic Company (NYSE:MOS) brought up the rear as fertilizer prices pulled back following a massive price spike due to the war in Ukraine and the resulting sanctions on Russia and Belarus, both major suppliers of potash fertilizers. Subsequently, fertilizer inventory began to accumulate in various locations including in Brazil as farmers refused to buy normal amounts of fertilizer due to high prices. An effort by the U.S. government to aid exports of Russian fertilizer also may have weighed on sentiment. We view the agriculture markets as still in a bull trend, but the pullback in Mosaic and other fertilizer names was substantial.”

3. Corteva, Inc. (NYSE:CTVA)

Number of Hedge Fund Holders: 50

Corteva, Inc. (NYSE:CTVA) is an Indiana-based agriculture company that works through two segments – Seed and Crop Protection. The company operates in the United States, Canada, Latin America, the Asia Pacific, Europe, the Middle East, and Africa. On November 3, the company posted a revenue of $2.78 billion, up 17.3% year-over-year, topping analysts’ estimates by $200 million. Corteva, Inc. (NYSE:CTVA) also affirmed FY 2022 net sales guidance of $17.2 billion to $17.5 billion, compared to a consensus revenue estimate of $17.31 billion. It is one of the top fertilizer stocks favored by elite hedge funds. 

On November 17, Barclays analyst Benjamin Theurer raised the price target on Corteva, Inc. (NYSE:CTVA) to $75 from $71 and kept an Overweight rating on the shares following the Q3 earnings season. While the analyst is optimistic about the agriculture space, he believes fiscal 2023 will be a year of slightly more normal levels of earnings, with results exceeding performance prior to sanctions against Belarus and the Russian invasion of Ukraine.

Among the hedge funds tracked by Insider Monkey, 50 funds reported owning stakes worth $941.8 million in Corteva, Inc. (NYSE:CTVA) at the end of Q3 2022, compared to 42 funds in the prior quarter worth $966.4 million. Israel Englander’s Millennium Management is the biggest position holder in the company, with 2.60 million shares valued at $148.70 million. 

Here is what Aristotle Capital Management Value Equity has to say about Corteva, Inc. (NYSE:CTVA) in its Q1 2022 investor letter:

“Corteva Agriscience, one of the world’s largest seed and crop protection companies, was a primary contributor for the quarter. Due to its respected brand and the value-added benefits of its patented seeds and crop protection solutions for farmers, Corteva has been able to more than offset input cost inflation with sustainable price increases. In addition, the company’s ongoing mix shift to higher-margin, premium products, a catalyst we previously identified, is aiding both sales and profit growth. Shares were likely also buoyed by the rise in crop prices. Market participants, perhaps eager to chase short-term trends, poured into the sector. At Aristotle Capital, we look past such gyrations and, as long-term investors, do not attempt to predict short-term changes in commodity prices. We remain excited about what we view to be high-quality characteristics and fundamental improvements that permeate Corteva’s business, not the least of which include its pricing power.”

2. Nutrien Ltd. (NYSE:NTR)

Number of Hedge Fund Holders: 52

Nutrien Ltd. (NYSE:NTR) is a Canadian company that provides potash, nitrogen, phosphate, and sulfate products. The company operates in the United States, Canada, South America, and Australia. On November 3, Nutrien Ltd. (NYSE:NTR) declared a $0.48 per share quarterly dividend, in line with previous. The dividend is payable on January 13, 2023 to shareholders of record on December 30. 

On November 17, Barclays analyst Benjamin Theurer reaffirmed an Overweight rating on Nutrien Ltd. (NYSE:NTR) but lowered the firm’s price target on the shares to $95 from $105 following the Q3 results.

According to the third quarter database of Insider Monkey, 52 hedge funds were long Nutrien Ltd. (NYSE:NTR), compared to 48 funds in the prior quarter. Jean-Marie Eveillard’s First Eagle Investment Management is the biggest stakeholder of the company, with 8.4 million shares worth $701.7 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.”

1. CF Industries Holdings, Inc. (NYSE:CF)

Number of Hedge Fund Holders: 65

CF Industries Holdings, Inc. (NYSE:CF) is an Illinois-based company that manufactures and sells hydrogen and nitrogen products for energy, fertilizer, emissions abatement, and other industrial activities worldwide. Although Q3 earnings missed estimates, the revenues rose 70% year-over-year to $2.32 billion and the company’s board authorized a new $3 billion stock buyback program.

On November 1, Mizuho analyst Christopher Parkinson maintained a Neutral rating on CF Industries Holdings, Inc. (NYSE:CF) but lowered the price target on the shares to $113 from $117. The analyst reiterated a favorable view of the agriculture industry but slashed estimates given a “shaky” near-term demand trend and input price volatility.

According to Insider Monkey’s data, 65 hedge funds were bullish on CF Industries Holdings, Inc. (NYSE:CF) at the end of the third quarter of 2022, compared to 52 funds in the prior quarter. Eric W. Mandelblatt’s Soroban Capital Partners held the biggest stake in the company, comprising 2.4 million shares worth $239.45 million. 

Here is what Chartwell Investment Partners has to say about CF Industries Holdings, Inc. (NYSE:CF) in its Q2 2022 investor letter:

“We sold the full position in fertilizer company CF Industries, which also had a 20%+ YTD return (through 6/30), as we had concerns that the company would announce capacity additions, which would negatively impact nitrogen pricing.”

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Disclosure: None. 9 Best Fertilizer Stocks to Buy According to Hedge Funds is originally published on Insider Monkey.