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 The Andersons, Inc. (NASDAQ:ANDE) 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.
READ ALSO: 15 Energy Infrastructure Stocks That Are Skyrocketing and 12 Best Middle East and Africa Stocks To Buy Right Now.
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.
A farmer driving a tractor over his field with a picturesque backdrop of the setting sun.
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).
The Andersons, Inc. (NASDAQ:ANDE)
Number of Hedge Fund Holders: 12
The Andersons, Inc. (NASDAQ:ANDE) operates across the agricultural value chain, with divisions in trade, ethanol, and plant nutrients. The company provides potash-based fertilizers as part of its plant nutrient group, catering to farmers and agribusinesses.
The Andersons, Inc. (NASDAQ:ANDE) offers a range of potash-based fertilizers, including Muriate of Potash (MOP 0-0-60), Potassium Fertilizer (0-0-25), which are professional-grade products designed for growers to improve crop yields, increase plant resistance to disease and pests, and enhance the overall quality of their crops. The company has experienced significant growth in demand for its potassium products in recent years, driven by increasing awareness of the importance of potassium for plant growth and development.
The Andersons, Inc. (NASDAQ:ANDE) has expanded its facility in Waterloo, Indiana, aimed at increasing organic storage capabilities to meet the growing demand for bulk organic nutrients in the Eastern Corn Belt and Midwest. This expansion has enabled The Andersons, Inc. (NASDAQ:ANDE) to become the only organic MOP bulk warehouse in the Midwest, providing convenient access to granular Muriate of Potash (MOP 0-0-60) for growers in the region. The company’s partnership with Intrepid Potash has supported it to ensure a stable supply of high-quality potassium products for its customers.
The Andersons, Inc.’s (NASDAQ:ANDE) potash fertilizers are priced competitively to ensure that customers can access the products they need at an affordable cost. These products are also designed to be easy to use and apply, with a range of formulation options and application rates to suit different crops and growing conditions.
Overall ANDE ranks 8th on our list of the best potash stocks to buy according to hedge funds. While we acknowledge the potential of ANDE 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 ANDE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article is originally published at Insider Monkey.
