We recently compiled a list of the 11 Best Potash Stocks to Buy According to Hedge Funds. In this article, we are going to take a look at where ICL Group Ltd (NYSE:ICL) stands against other best potash stocks to buy according to hedge funds.
Potash is a group of minerals and chemicals that contain potassium, a vital nutrient for plants and animals. The term refers to compounds including potassium sulfate, potassium-magnesium sulfate, potassium nitrate, potassium carbonate, potassium oxide, and potassium chloride. Among these, potassium chloride (KCl), also known as muriate of potash (MOP), is the most commonly produced and used form of potash.
Potash is primarily used to produce fertilizers, which are essential for plant growth and development. Fertilizers containing potash help to support plant growth, increase crop yield, and enhance disease resistance. Additionally, potash helps to improve water preservation, making it an indispensable supplement to the natural nutrient content of soils. Soils often lack these essential nutrients, or growing crops have depleted them, making potash a necessary addition to maintain soil fertility. With approximately 95% of potash being used in fertilizers, its role in agriculture cannot be emphasized enough. The remaining 5% is used in the production of potassium-bearing chemicals, such as detergents, ceramics, pharmaceuticals, water conditioners, and alternatives to de-icing salt.
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Potash is mined from underground deposits, either through conventional underground ore mining or by injecting water into the underground ore body and extracting the resulting brine. According to a report by the Canadian Government, potash production was estimated at 67.5 million tonnes globally in 2023, with Canada contributing 32.4% of the global supply. Canada, Russia, and Belarus dominate global potash production and accounted for 65.9% of the total in 2023. Canada is the world’s largest producer and exporter of potash, with 11 active mines in Saskatchewan, producing 21.9 million tonnes and exporting 22.8 million tonnes in 2023, which accounts for over 41% of global exports.
Potash prices have fluctuated over the years, declining from 2013 to 2016 and remaining relatively low until 2020. However, in 2021, prices rose sharply due to strong demand, and the surge continued into 2022, peaking at $1,202 per tonne in April, driven by geopolitical tensions and the Russian invasion of Ukraine. By June 2023, prices had fallen to $328 per tonne as global supply concerns subsided.
Potash is a vital nutrient for plants and animals, and its importance in fertilizers cannot be overstated. As the world’s population continues to grow, the demand for potash is likely to increase.
Farmers in a field surrounded by crop rows, nourished by agricultural inputs provided by the company.
Our Methodology
To compile our list of the 11 best potash stocks to buy according to hedge funds, we sifted through financial media reports and potash-related ETFs to find companies that are involved in the production and processing of potash. We then used Insider Monkey’s hedge fund database to rank 11 stocks with the largest number of hedge fund holders, as of Q3 2024. The list is sorted in ascending order of hedge fund sentiment.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
ICL Group Ltd (NYSE:ICL)
Number of Hedge Fund Holders: 11
ICL Group Ltd (NYSE:ICL) is a multinational specialty minerals and chemicals company with a strong focus on potash, phosphate, and advanced specialty fertilizers. The company is headquartered in Israel and operates 13 sites in over 30 countries.
In the potash segment, ICL Group Ltd (NYSE:ICL) has been taking a disciplined approach to manage its sales volumes and fetch better pricing. In Q3, the company maintained its production levels but started to limit its total annual potash sales capacity from 4.75 million metric tons to 4.6 million metric tons. This decision is driven by the expectation of improved conditions in 2025, with firm prices and better transportation costs. The company is confident that its strategic approach will yield better returns in the potash season. The company’s potash division has also been benefiting from operational and efficiency efforts, particularly in Spain, where record production levels have been achieved.
ICL Group Ltd (NYSE:ICL) is exploring opportunities to increase its potash sales in regions such as Brazil, where demand is expected to remain strong. Furthermore, the company is investing in its logistics and transportation infrastructure to improve its ability to supply potash to its customers efficiently and cost-effectively.
Overall ICL ranks 9th on our list of the best potash stocks to buy according to hedge funds. While we acknowledge the potential of ICL as an investment, our conviction lies in the belief that 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 ICL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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