Stockchase InsightsNutrien Ltd.NTR.TOBUYJun 17, 2024

Chart continues to work. Higher highs, higher lows. Looks positive, really likes the setup. If it breaks out to new highs, he'd continue to add exposure.

The limited exports that can get through the Strait of Hormuz will benefit Nutrien. Canada's natural gas industry has an opportunity and Nutrien has access to this. He has owned Nutrien and its predecessors for almost thirty years and plans to own for a long time. It has become a very integrated fertilizer company and now sells to farmers.

It's a fundamental need, a core holding for him. We have great resources in Canada. Cyclical, buy when cheap. Not overly cheap now, but a reasonable entry point for a long-term investor. If it moves much more, he'll trim his position.

Technically shouldn't be as volatile as it has been, which has been because of the wars in Ukraine and now the Middle East. Retail business underpins the dividend. As population grows long term, so will the need for fertilizer. She buys for clients when it gets into the $80s. Dividend is safe and growing. Yield is ~3.2%.

Breaking out of a downtrend here -- encouraging. In the "yellow-neutral zone" (26-50% of stocks). Not bad. Looks to have bottomed and be turning up. Encouraging so far.

Peak on chart due to disruption in fertilizer components from Iran war. She was buying last week below $90. Good for the patient investor with a long horizon. Limited new potash supply coming on, the need will increase, high barriers to entry. 

Yield is 3.4%, which is paid from recurring revenue from the defensive retail channel. The solid dividend makes it safer to invest in this cyclical stock. Dividend's grown over 10% for past few years.

Trades at 11x forward PE and pays a 2% dividend. It will benefit from sustained fertilizer prices which have been impacted by the US-Iran war. That said, NTR benefits from lower energy costs, lowering their input costs. If the price of fertilizer stays flat or moves slightly higher, NTR will move higher. There will be capital rotation eventually. 

Lower nat gas prices do help. Likes its capital allocation. Farmer balance sheets are improving. Last quarter was in line. Buying back stock, increased dividend. Reasonable multiple of 12x PE for 2027, growing ~6%. Quality company, right theme. Likes it, but at a lower level.

In a trading range since Covid. Should do better when the world opens up again and there's less supply-driven inflation. You won't go terribly wrong owning it, as people still have to eat. With the dividend, you should do well over 5 years.

Likes its longer-term uptrend, despite recent pressure. A recent top pick for his firm's clients. Inflationary environment favours a shift to hard assets.

She owns it for the long-term, and owned it at $70. Buy dips, say if Trump reaches peace with Iran and shares drop 8%. Is volatile because it is a commodity. However, their dividend is covered by their stable retail business. The Strait of Hormuz is blocking fertilizer traffic.

Safe, reliable source of fertilizer in NA. Stock price has reflected constraints on supply from Middle East, and that'll be a shorter-term tailwind.

Eroding confidence in near-term supply. If crop prices soar, farmers will have more $$ for fertilizer. Stock's not crazy pricey, but it is overstretched along with other commodities. EPS path over next 3 years looks flat. Better value elsewhere.

Lovely U-turn. Earnings trend and FMV trend are up, and stock is following nicely. Likes it. Tentative, cross-your-fingers target of $153. Still a Buy today.

Price of fertilizer has been affected by Iran conflict. Jumped up 7-8% yesterday, so give it some time. If the Strait opens up soon, prices will come down and you'll have a better buying opportunity.