Mark Sebastian Nutrien Ltd. NTR-T TRADE Sep 23, 2024

World's largest ag-crop nutrient business. Vertically integrated. Believes prices for its input commodities have bottomed, supported by high and rising cash-crop prices. Farmers have to replace nutrients in soil, which was delayed while prices were so high. Trades at book value. Bounced off lows, but still sees upside. In his dividend growers mandate. Yield is 4%.

World's largest crop-nutrient business. Upstream production is vertically integrated with downstream retail. Gamechanger for him is that commodity price has bottomed for potash, nitrogen, and phosphate. Cash crop commodity prices are also slowly improving. 

Management changes. Operational changes to improve profitability. Trading at 1.1x book. Good luck tariffing potash, as the US produces only 5% of what it needs, importing 70% of requirements from Canada. Yield is 4.29%.

Brand-new position for him. Seems to be breaking out of resistance after basing. Former peaks are resistance targets. Likes it as part of his commodity complex. Bought his first 2% because of the breakout. If it breaks down from resistance, he'll take one leg out. If it fails long-term support, he'll get totally out. Yield is 3.68%.

Added to his portfolio in January. Has a long way to climb back, though not necessarily to the peaks of 2022. Prices of its component commodities are rising, amidst the backdrop of slowly improving prices for major agricultural cash crops. Margins are improving in South America. 

Likes the chart, turned a corner last summer. Lots of upside. Discounted valuation. Prolifically buying back shares. Yield is ~3.7-3.8%, above its long-run average.

Stock's come back on relief from tariffs. Globally, demand for agriculture and fertilizer continues. Well positioned. Be aware that this name will be choppy, as we're not out of the tariff woods yet. More of a speculative play.

Seeking new West Coast terminal to export more potash. Prices are just starting to trend a bit higher, which means demand is starting to pick up and supply is going down. Long term, warmer temperatures will mean growing seasons will be more difficult, so fertilizer demand should continue to rise. Yield is 3%.

Understand that commodity prices are always volatile in the short term. Up 27% YTD, 15% over 5 years, but 10 years has been 6%, 15 years has been 10%. So total return over time should be 5-10%. He doesn't offer price targets. 

Definitely putting in a major low. Highlighting this quite frequently to clients over the last couple of months. His fundamental analyst is highlighting this as well. Broke the bigger multi-year downtrend from 2022. Lots of institutional buying. Its peer in the States, MOS, is showing the same pattern.

Within the chemicals space, the fertilizer stocks are much more interesting and have a better technical setup. Recently bought this name. Commodity-oriented space is continuing to firm up. Very long-term base going back to 2016 is being tested, with higher lows.

(A Top Pick May 22/25, Up 0.45%)

Commodities in coming years should outperform financial assets. Look at gold and uranium. He likes potash. The chart was terrible for a long time, then based, and is recently breaking out.

Bumpy. Q2 is a crucial selling season for them, and supply/demand dynamics in potash will be key. Reintroduced it to portfolios in January this year. Fertilizer cycle has bottomed and is slowly turning up. Vertically integrated with downstream farm supply stores. Operational improvement in South America to improve margins.

Trading at half of peak value of 3 years ago. Lots of upside.