5 Best Fertilizer Stocks to Buy According to Hedge Funds

In this article, we discuss 5 best fertilizer stocks to buy according to hedge funds. If you want to see more stocks in this selection, check out 9 Best Fertilizer Stocks to Buy According to Hedge Funds. 

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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