I added Nutrien to my portfolio on September 10th! I allocated 4.5% of the account it's in. Great to see you agree with my thesis because I value your opinion!
80% equities 20% cash. I plan to take advantage of the current market situation with the rate cuts as leading indicators predict a bullish S&P 500 by 2025, my only concern is how to properly allocate a large stock/bond portfolio for maximum returns.
I don’t see a problem fully invested into stocks as long as you know what the heck you're doing, ideally it's best you consider advisory services to avoid terrible mistakes.
Agreed, utilizing a financial specialist did the trick for me in barely 5 years. I worked hard everyday as a teacher for 32 years and my salary was over 100k/yr, enough to get me fully invested. I'm semi-retired today with about $1m, and only work 7.5 hours weekly.
My CFA ’Marisa Michelle Litwinsky’ , a renowned figure in her line of work. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market.
I greatly appreciate it. I'm fortunate to have come upon your message because investing greatly fascinates me. I'll look Marisa Michelle Litwinsky up and send her a message. You've truly motivated me. God's blessings on you.
For cyclical stocks, pe is irrelevant. Basically, you want to buy them at depressed operating margins and sell them at high operating margins. provided they can survive a down cycle - not burdened by big debt and free cash flow generative.
While sustainable agriculture trends may impact traditional fertilizer demand, Mosaic and Nutrient are already investing in eco-friendly solutions, such as precision agriculture and organic fertilizers, to mitigate risks and capitalize on the growing demand for environmentally responsible practices.
Always good to see you dive in single companies Sven! I think your brilliant thought of "exploit factories build pre-inflation" could be extended in other companies to, like TSM. Regarding the topic of the day, i suggest to study Nutrien's Management in depth. I saw them do very stupid things 2 years ago.. like take more debt to do buyback when the stock was overvalued. I don't know if the CEO and the CFO are the same nowadays.
Hi Sven, something you may not know about these phosphate producing companies is that the same phosphate deposits they are already mining also contain extremely high concentrations of rare earth elements. I am a geologist and while extraction of REEs from phosphate deposits is not currently being practiced, it is something that many scientists are currently researching, and some industry figures are taking a closer look at. There is a very real possibility that within the next 10 years, many phosphate deposits are also producing REEs.
Rare Earths are not that rare actually 😊 You can find them in large quantities around the world. Processing and separating them is environmentally harmful and toxic for living things, so it is not possible to do it in Canada. Extracting and exporting them to where they can be processed is not feasible because of the costs.
@@henrymakepeace This is generally true of most REE deposits around the world because the REEs tend to be hosted in highly refractory minerals that are difficult to process. However, sedimentary phosphate deposits are different because the REEs are very easy to extract with few modifications to existing phosphate processing practices or environmental complications. See Emsbo et al. (2015) for a more detailed explanation. While Nutrien and Mosaic do most of their potash mining in Saskatchewan, Canada, most of their phosphate mining is done in Florida (and Brazil in the case of Mosaic). The Hawthorn Formation that is mined in Florida has relatively low REE contents compared to other phosphorites throughout North America (such as the Phosphoria Formation in the midwest). However, the REE contents of the Brazilian phosphorites mined by Mosaic have not been published to my knowledge.
I recently jumped back into NTR as well, but based it off a chart based entry. Made a small purchase to get it on the radar again (I'm horrible at actually watching my "watch" list). I'm glad I'm in good company, and once again, I look forward to riding this up with you. Last time, both you and I sold too soon! Better a bird in the hand, though. Still love your input on companies, and I look forward to your videos.
Thanks Sven! I think is good as inflation hedge, love the idea, but analyzing fundamentals, I think FMC ist a better option. Why do you prefer MSC and NTR?
Sven, very interesting pick. I think we need to take 0,4m of repayment of lease liabilities from the cashflow number you presented in the video. These are effectively recurring rent costs that accounting laws have taken from the P&L onto the balance sheet for some obscure reason.
Interesting idea! As a norwegian i follow the competitor Yara, but stayed away as there is still alot of extra capacity coming to the market until 2026, so feels a bit early in the capital cycle, but I might be wrong
Thanks Sven! I don't understand these businesses and will stay away, but always good to have more ideas, especially in this USA market where everything seems expensive (at least in the USA).
To be kinda blunt, I am giving up on investing in stocks... I put between 2000 to 3000 a month and it's nothing but down down.... Sooooo frustrating and I only invest in boring big companies. How can I capitalize in such a market?
Absolutely! Wealth is made in bear markets. We aren’t in a bear yet, but nibbling heavy red days has proven to be fruitful for me over 4 years of investing. I am at 2.25 mil. Biggest positions VOO, VTI, SCHD, VYM, and now looking to build up DRGO alongside finding quality value/growth stocks. I got $48k divs last year in taxable divs. Q2 taxable divs this year was $17,388 this year. Don't sell when the market is down. Having a skilled CFA that puts the time in to do in-depth research can be invaluable in strategizing your portfolio.
I'm cautious about giving specific recommendations as everyone's situation varies. Consider independent financial advisors like "KATHERINE NANCE DIETZ" I've worked with her since the pandemic and highly recommend her. You can check if she meets your criteria.
excellent share, curiously inputted Katherine Nance Dietz on the web, spotted her consulting page ranked top and was able to schedule a call session. Ive seen commentaries about advisors but not one looks this phenomenal
Sven, do you give any consideration to buybacks driving more growth than what is organically there, so it amounts to financial engineering. That engineering can also work against you if they decide to issue shares.
Recently bought some recommended stocks and now they are just penny stocks. There seems to be more negative portfolios in the last 3rd half of 2023 and first half of this year with markets tumbling, soaring inflation, and banks going out of business. My concern is how can the rapid interest-rate hike be of favor to a value investor, or is it better avoiding stocks for a while?
Just ''buy the dip'' man. In the long term it will payoff. High interest rates usually mean lower stock prices, however investors should be cautious of the bull run, its best you connect with a well-qualified adviser to meet your growth goals and avoid blunder
Same, nutrien has been in my rear view mirror since 2023, I've gone in at 70 and DCA since then, quite the canadian staple, was named PotashCorp before.
I see that some of those cyclical commodity stocks that you recommend (like these two) have quite high PE ratios. Is the PE Ratio not very telling when it comes to commodity stocks?
Hi Sven, Thank you for the great work. What is your opinion on "Signify N.V." at the current level - a stock which you mentioned a time ago here in the channel?
thanks again for sharing your ideas. what i don't understand is why you focus only on "gain" metrics and ignore the debt. from what i see NTR has 13x debt than cash, retained earnings are dropping, quick ratio is 0.64 and they have 5x debt than FCF. to me they are valued correctly at this point in time. there is only 21% probability of upside. however, EPV dictates a distinct possibility of 100% upside. MOS has 11x debt than cash, quick ratio is 0.57, with 4x debt than FCF. very low probability of upside from here. but again, EPV might allow for 100% upside with this too. the reason i am so conscious about debt (and to at least allow for ackman's rule of thumb - 3 x FCF = debt) is because these are very uncertain times, and companies with debt tend to fair poorly then. buffett is holding a lot of cash (unlike him) for example... anyway, my point is there are undervalued companies out there that have more cash than debt, which are better suited to weather such times.
Hey Sven, amazing video as always! Thanks a lot for your ideas. In the same field, what do you think about Verde AgriTech? Can we compare it to Nutrien and Mosaic but waay more risky and potentially more rewarded?
Good analysis, thanks. However, I wouldn't buy these two stocks outright now because a protracted and steady down trend never ends in a calm way. Instead you need to be patient and wait for the final and violent flush out which will allow you to buy these stocks at another 15-30% discount from here. The reason is, many weak hands have bought and even added on the way down and now are sitting on losing positions. They need to be shaken out before we see a turn.
I already own the Norwegian company Yara, and also own some Sqm. So I am exposed to the sector. But maybe not the best time to buy Mosaic now, since its headquarters is in Tampa Florida. Where the hurricane is now..
I looked at Nutrient a few years ago...thought it was too expensive...I see that is not true now! Plus, with 'everything' going up, up, up these days (scary!), it's nice to see what looks like a deal. And I do have something I am thinking of getting out of, so maybe NTR is the thing to switch into.
@value-investing the analysis is great but in the end it seems that the main drivers of the future success of Nutiren is the price of phosphate and potassium (the inputs of the fertilizers). If that’s the case better take an option on those commodities instead of looking for an indirect exposure through a company. What you think ?
Just a few thoughts: nestle growth : is it in CHF or USD? Because a 2% average growth in EPS over the long term in CHF is probably at least as good as a 3% growth in USD. The USD depreciates against the CHF over the long term. I can t speak for the other stocks ( and I don t say that Nestle is especially a Buy at these price level), but we might see Nestle as an Equity Bond ( as Buffett often refers) : we are « very » confident of stable or slightly increasing EPS of Nestle. It can then be compared as a Swiss Bond. Therefore, the dividend yield or the FCF yield should be compared with long term yield of swiss bonds. Thus a possible understanding of a 18-20x PE ratio. Of course that says nothing about if Nestle is a good risk/reward with respect to other alternatives.
excellent point! But what matters to me is the absolute return to me, don't care much to what it is compared to:-) Plus, there are things in switzerland trading at better levels with less risk, actually no USD risk compared to CHF. At the end this is an USD EUR business, not CHF...
Greeting, great analysis. Can you do a similar analysis of maersk and hapag-lloyd shares, taking into account the strike in the U.S. They are currently quite low, so are they potentially a good investment?
Those graphs for fertiliser prices look the exact same as the m2 money supply w/ a lag. The forward look on m2 money supply with a 18 month lag is down. My hunch is these drop as the m2 money supply lag shows up in inflation, then off to the races. If that plays out I’d be interested in circa 6 months.
Never been anything wrong for long term investors with buying cyclical stocks in a downturn. And this has always been Sven's strength. And Nutrien is pretty clearly near a historic cyclical low.
But wasnt the peak in 22 due to geopolitical reasons ? In the stock history I checked I don't see a lot of cyclical behavior ... the stock had a run up exactly lining up with Russia Ukraine war outbreak and that makes alot of sense because russia is a big producer of these products as well and with sanctions being imposed on them the supply /demand ratios changed. Just asking if I get that right or If I'm on the wrong track here.
Hi Sven, What do you think of K+S Aktiengesellschaft which is in the same industry? Is it still a zombie compagny like 5 years ago? Thanks again for your work, it is very valuable.
Looks great if they can indeed generate that much cash. Looking at mosaic, the stock barely moved historically. Riding boom and bust cycles is harder than it looks, so bagholding is real risk. What’s different now? Is your case linked to capacity in Russia falling away?
I always question myself why no buy and hold investor is talking about collecting option premiums aka cash secured puts and covered calls. Do they not know about it or what's the deal? You can make way more profit than just hold and do nothing. Or maybe no one wants to get this "secret" out. Can someone comment about this topic?
My issue with those stocks is the capital allocation. They did massive stock buyback in 2022 when the stocks were sky high. And obviously, now the stock prices are lower, nothing...
NTR's bad PE is due to the impairment charge taken on their Brazilian operation. Is this an indictment of bad management decision making or something they couldn't have forseen and we put it as a one-off?
@@Value-Investing 5:54, Potash adjusted ebitda sensitivity, 6:35 adjusted EBITDA..I think ebitda should not be used in any valuation calculation/estimates even less in free cash flow discussions.
i like more CF and CTVA (profit margins, ROE, brands, products diversification), but their valuations are higher.. i'd buy these kind of cyclical business only in a downturn economy (recession) when prices and valuations would be much lower! until then, Energy sector speaks to me better! (at least, until 2030) ;)
yes, but keep in mind the strategy here and the diversified portfolio, for a thing with 20 positions these are already good starting points, you can't predict the cycle!
because when the PE ratio is high, or even negative, the company doesn't make much or any money, as it is likely showing a cycle downturn, which is the best time to buy a cyclical. More in this Peter Lynch stocks to buy overview categorization: ruclips.net/video/jw1S1V4ASQw/видео.html
Thanks for the video! Have you ever analyzed Payton Planar? At first sight this stock looks not bad( enterprise value/fcf 10 %, roic and roe > 15 %, ...
Wasn't the bust due to Russia's role in the worldwide potash supply? I don't know if potash was/is part of the Western sanctions due to Russia's attack on Ukraine that started in February 2022, but it could be an issue. I like the whole "food production" as a value investment but there's other companies like LAND, FPI, BRASILAGRO on the REIT side, ADM, K&S on the farmer's supply side, NESN, UNILEVER, ... on the food processing side ... all contributing to staples
I`ve been taking a look at this company recently. I like the story, sector, future and numbers. However, it has a high PE ratio. I know PE its not "sacred", but I guess I am missing something. Can somebody give me a little help about the PE? It doesnt look like a cyclical company, but obviously I am wrong. Thanks for the video!!
since inception of the platform model portfolio the S&P 500 did around 13%, we are at around 12%. Still good, but I have made a few mistakes. I think the key factor here is whether your life strategy is value investing or indexing. I don't know what the S&P 500 will do next, I know what the businesses I own will most likely deliver!
The problem is that when you think about the S&P500, you are fixated with the past 15 years (0% rates with no inflation, 8t printed by the Fed, corporate tax cuts, ballooning debt, etc). It is very hard to beat that. It is unsustainable. And most importantly, you invext in the next 15 years, not the past. The S&P500 (or any other index for that matter) has historically failed to produce meaningful returns from anything above 25x Shiller P/E and it currently trades at 37x. Why does it fail? Because in order to earn a return from a lunatic multiple, you need sustained strong growth, sustained high margins and sustained high multiples (all 3) which is very hard to accomplish over extended periods of time. So instead of wasting your time looking at he performance of an index, it may be more productive to look for assets whose cashflows allow you to compound over time regardless of what the markets do, which is what value investors like Sven are focused on.
@@Value-Investing Appreciate the reply. My strategy is to make money and beat the index, or at least match it every year. I try not to limit myself to any particular strategy as the market doesn't operate that way. Strictly speaking, value investing should beat the market by definition, and if you can't beat the index ie find undervalued stocks, then the analysis was wrong. Too many people restrict themselves to value, dividend, growth, momentum, sector rotation tribes. In reality we should use all aspects. Thank you for your videos, I watch them as part of my wider absorption of views on the market but I also loosely track trades RUclipsrs make to see if outcomes materialise, hence my initial comment.
In 2022, the top exporters of Fertilizers were Russia ($18.7B), Canada ($14.5B), China ($12.7B), United States ($8.19B), and Morocco ($7.92B). Isn't the 2022 jump/cycle linked to the Ukrainian-Russian war?
you didn’t mention that the boom in 2022 fertilizer prices were due to ru/ua war and fears of widespread impact on agricultural production and export limits. then the prices of western fertilizers companies went low due to Russia dumping fertilizers for a ridiculously cheap price. At this constellation, I dont see the mosaic and nutrien prices growing soon
This is what Canadian National Railways officials just said (highlighted the word POTASH). So IMHO Nutrien is still not a buy but I could be wrong any day. 😊 '..while sequential growth is expected, year-over-year growth will be flatter. Strong grain performance and recovering domestic intermodal volumes are tailwinds, but macroeconomic headwinds and POTASH comparisons present challenges. They are comfortable with the low end of the guidance range.'
@@afonsodeportugal I did not compare ICL and MOS and purchase ICL instead of MOS. I purchased ICL and NTR because they are potentially undervalued companies at cyclical lows. You can't own everything. I just happen not to own MOS at this time.
Both stocks are hard pass for me. I do like mosaic more than NTR. Mosaic dividend offering is a bit unsafe for me. If they cut their dividend, it can really open up their cash flow to bring down debt. Also their projections have negative revenue growth for the next three years and guidance is not soo great. I would like the stock to get below $20 for me to even to consider buying it. Need a bigger margin of safety. Buybacks are nice but just enough for me to purchase the stock at these prices.
I just had a look at Mosaics last quarterly report and they aren't earning income from operations. Their cash flow is generated by depreciation and foreign currency adjustment. Not a good investment.
Dr. Carlin; you are original & your channel is definitely unique.
I appreciate your insights.
Thank-you!
I appreciate that!
I added Nutrien to my portfolio on September 10th! I allocated 4.5% of the account it's in. Great to see you agree with my thesis because I value your opinion!
Fantastic!
Great to see the quadrant back! It helps to put things in perspective.
I agree! One more vote for bringing the quadrant back!
80% equities 20% cash. I plan to take advantage of the current market situation with the rate cuts as leading indicators predict a bullish S&P 500 by 2025, my only concern is how to properly allocate a large stock/bond portfolio for maximum returns.
I don’t see a problem fully invested into stocks as long as you know what the heck you're doing, ideally it's best you consider advisory services to avoid terrible mistakes.
Agreed, utilizing a financial specialist did the trick for me in barely 5 years. I worked hard everyday as a teacher for 32 years and my salary was over 100k/yr, enough to get me fully invested. I'm semi-retired today with about $1m, and only work 7.5 hours weekly.
very encouraging for folks starting out like myself, who is the professional guiding you please? in dire need of proper asset allocation.
My CFA ’Marisa Michelle Litwinsky’ , a renowned figure in her line of work. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market.
I greatly appreciate it. I'm fortunate to have come upon your message because investing greatly fascinates me. I'll look Marisa Michelle Litwinsky up and send her a message. You've truly motivated me. God's blessings on you.
For cyclical stocks, pe is irrelevant. Basically, you want to buy them at depressed operating margins and sell them at high operating margins. provided they can survive a down cycle - not burdened by big debt and free cash flow generative.
Except I don’t see any cycles in their stock price. Just one peak and that’s it.
Love this pick! Mosaic and Nutrient are undervalued gems. Fertilizer demand will only increase with global food needs.
Totally agree, Mosaic's diversified fertilizer portfolio and Nutrient's strategic expansions position them for long-term growth.
I can attest to increasing fertilizer demand. Global food security concerns will drive prices up, benefiting Mosaic and Nutrient
Have you considered the impact of sustainable agriculture trends on traditional fertilizer demand? Mosaic and Nutrient need to adapt.
While sustainable agriculture trends may impact traditional fertilizer demand, Mosaic and Nutrient are already investing in eco-friendly solutions, such as precision agriculture and organic fertilizers, to mitigate risks and capitalize on the growing demand for environmentally responsible practices.
I've been researching Mosaic's dividend history... impressed by their consistency. Considering adding more to my portfolio.
When Sven drops a commodity stock video, I click. I have been buying Ntr for months now, all the way down from $80 CAD.
Whoaaaaa asked this yesterday of you!’n you probably already made the video but that’s super cool
That big Potash price boom was due to Russia and Belarus exports not making it through to markets for a short time.
Always good to see you dive in single companies Sven! I think your brilliant thought of "exploit factories build pre-inflation" could be extended in other companies to, like TSM. Regarding the topic of the day, i suggest to study Nutrien's Management in depth. I saw them do very stupid things 2 years ago.. like take more debt to do buyback when the stock was overvalued. I don't know if the CEO and the CFO are the same nowadays.
Thank you for this analysis! Nutrien is big in my city and area. I just saw a Nutrien truck the other day on the way to work.
Hi Sven, something you may not know about these phosphate producing companies is that the same phosphate deposits they are already mining also contain extremely high concentrations of rare earth elements. I am a geologist and while extraction of REEs from phosphate deposits is not currently being practiced, it is something that many scientists are currently researching, and some industry figures are taking a closer look at. There is a very real possibility that within the next 10 years, many phosphate deposits are also producing REEs.
Wow thank you for the insights
Avenira company on Australian ASX
Rare Earths are not that rare actually 😊 You can find them in large quantities around the world. Processing and separating them is environmentally harmful and toxic for living things, so it is not possible to do it in Canada. Extracting and exporting them to where they can be processed is not feasible because of the costs.
@@henrymakepeace This is generally true of most REE deposits around the world because the REEs tend to be hosted in highly refractory minerals that are difficult to process. However, sedimentary phosphate deposits are different because the REEs are very easy to extract with few modifications to existing phosphate processing practices or environmental complications. See Emsbo et al. (2015) for a more detailed explanation. While Nutrien and Mosaic do most of their potash mining in Saskatchewan, Canada, most of their phosphate mining is done in Florida (and Brazil in the case of Mosaic). The Hawthorn Formation that is mined in Florida has relatively low REE contents compared to other phosphorites throughout North America (such as the Phosphoria Formation in the midwest). However, the REE contents of the Brazilian phosphorites mined by Mosaic have not been published to my knowledge.
I recently jumped back into NTR as well, but based it off a chart based entry. Made a small purchase to get it on the radar again (I'm horrible at actually watching my "watch" list).
I'm glad I'm in good company, and once again, I look forward to riding this up with you. Last time, both you and I sold too soon! Better a bird in the hand, though. Still love your input on companies, and I look forward to your videos.
Apart from nutrien what else are you buying?
Thanks for sharing!
Dr. Sven Carlin = Really good analysis
thanks!
Thanks Sven! I think is good as inflation hedge, love the idea, but analyzing fundamentals, I think FMC ist a better option. Why do you prefer MSC and NTR?
I own these stocks already i just to find me a good portfolio manger
Its the smart thing to do nowadays.
Yes i agree. My advisorr decides entry and exit commands on my portfoliio, I've accrued over $550k in barely a year.
@DanielYarn-t7r Svetlana Sarkisian Chowdhury is the advisor i use. You may have heard of her my.
Svetlana Sarkisian Chowdhury is the advisor i use. You may have heard of her my.
I just curiously searched her up, She seems proficient considering her résumé. I wrote her an email and scheduled a call. Thank you for sharing
Sven, very interesting pick. I think we need to take 0,4m of repayment of lease liabilities from the cashflow number you presented in the video. These are effectively recurring rent costs that accounting laws have taken from the P&L onto the balance sheet for some obscure reason.
good point, I was missing a bit of money there...
It doesn’t change the case you are making though, thanks again for sharing this stock pick 👍
Thank you so much Sven for making this 🙏🙏🙏
My pleasure!
welcome on board Mr Carlin. :D
Rio Tinto need some attention as well.
Interesting idea! As a norwegian i follow the competitor Yara, but stayed away as there is still alot of extra capacity coming to the market until 2026, so feels a bit early in the capital cycle, but I might be wrong
good point
It’s so funny you posted these videos I was just researching these two stocks this week.
Thanks for the video. Good the new edition/transition. Like the new summary table/short quadrant
My sister works for Nutrien :) I bought last time you did and sold since then.
thanks Sven great timing on NTR & MOS here from risk reward perspective. I am holding ADM as well looking for this to move as I am up 8% thus far
That's a very good idea Sven, thank you!
Thanks Sven! I don't understand these businesses and will stay away, but always good to have more ideas, especially in this USA market where everything seems expensive (at least in the USA).
To be kinda blunt, I am giving up on investing in stocks... I put between 2000 to 3000 a month and it's nothing but down down.... Sooooo frustrating and I only invest in boring big companies. How can I capitalize in such a market?
Great Buying opportunities today. Embracing pullbacks and correction is key. This is where the money is made!
Absolutely! Wealth is made in bear markets. We aren’t in a bear yet, but nibbling heavy red days has proven to be fruitful for me over 4 years of investing. I am at 2.25 mil. Biggest positions VOO, VTI, SCHD, VYM, and now looking to build up DRGO alongside finding quality value/growth stocks. I got $48k divs last year in taxable divs. Q2 taxable divs this year was $17,388 this year. Don't sell when the market is down. Having a skilled CFA that puts the time in to do in-depth research can be invaluable in strategizing your portfolio.
I could really use the expertise of this CFA
I'm cautious about giving specific recommendations as everyone's situation varies. Consider independent financial advisors like "KATHERINE NANCE DIETZ" I've worked with her since the pandemic and highly recommend her. You can check if she meets your criteria.
excellent share, curiously inputted Katherine Nance Dietz on the web, spotted her consulting page ranked top and was able to schedule a call session. Ive seen commentaries about advisors but not one looks this phenomenal
I’ve been liking the cheap nat gas side of the thesis as well
Not that it matter, but I really like the NTR purchase Sven. Thanks for sharing!
BTW... Also like the Risk/Reward quadrant.
Sven, do you give any consideration to buybacks driving more growth than what is organically there, so it amounts to financial engineering. That engineering can also work against you if they decide to issue shares.
ah, let me first see it!
Good job Sven, again you have my like. I recommend ebro foods.
Hi Sven! Is Samsung a value play in the making?
thanks for the video! are these stocks also bets on oil prices?
Recently bought some recommended stocks and now they are just penny stocks. There seems to be more negative portfolios in the last 3rd half of 2023 and first half of this year with markets tumbling, soaring inflation, and banks going out of business. My concern is how can the rapid interest-rate hike be of favor to a value investor, or is it better avoiding stocks for a while?
Just ''buy the dip'' man. In the long term it will payoff. High interest rates usually mean lower stock prices, however investors should be cautious of the bull run, its best you connect with a well-qualified adviser to meet your growth goals and avoid blunder
Do you mind sharing your financial planner ?
Same, nutrien has been in my rear view mirror since 2023, I've gone in at 70 and DCA since then, quite the canadian staple, was named PotashCorp before.
yes, merged with Agrium
Hi appreciate your video, are you still holding Nutrien and Mosaic?
Thank you for sharing your research :)
I see that some of those cyclical commodity stocks that you recommend (like these two) have quite high PE ratios. Is the PE Ratio not very telling when it comes to commodity stocks?
Hi Sven,
Thank you for the great work. What is your opinion on "Signify N.V." at the current level - a stock which you mentioned a time ago here in the channel?
thanks again for sharing your ideas.
what i don't understand is why you focus only on "gain" metrics and ignore the debt. from what i see NTR has 13x debt than cash, retained earnings are dropping, quick ratio is 0.64 and they have 5x debt than FCF. to me they are valued correctly at this point in time. there is only 21% probability of upside. however, EPV dictates a distinct possibility of 100% upside.
MOS has 11x debt than cash, quick ratio is 0.57, with 4x debt than FCF. very low probability of upside from here. but again, EPV might allow for 100% upside with this too.
the reason i am so conscious about debt (and to at least allow for ackman's rule of thumb - 3 x FCF = debt) is because these are very uncertain times, and companies with debt tend to fair poorly then. buffett is holding a lot of cash (unlike him) for example...
anyway, my point is there are undervalued companies out there that have more cash than debt, which are better suited to weather such times.
Hey Sven, amazing video as always! Thanks a lot for your ideas. In the same field, what do you think about Verde AgriTech? Can we compare it to Nutrien and Mosaic but waay more risky and potentially more rewarded?
Good analysis, thanks. However, I wouldn't buy these two stocks outright now because a protracted and steady down trend never ends in a calm way. Instead you need to be patient and wait for the final and violent flush out which will allow you to buy these stocks at another 15-30% discount from here. The reason is, many weak hands have bought and even added on the way down and now are sitting on losing positions. They need to be shaken out before we see a turn.
as said in the video, it is just part of a strategy or diversiied portfolio
If you're going for fertilizers, why not buy ICL?
I already own the Norwegian company Yara, and also own some Sqm. So I am exposed to the sector. But maybe not the best time to buy Mosaic now, since its headquarters is in Tampa Florida. Where the hurricane is now..
Thanks again for the great video
I looked at Nutrient a few years ago...thought it was too expensive...I see that is not true now! Plus, with 'everything' going up, up, up these days (scary!), it's nice to see what looks like a deal. And I do have something I am thinking of getting out of, so maybe NTR is the thing to switch into.
Thank you.
thanks for commenting!
@value-investing the analysis is great but in the end it seems that the main drivers of the future success of Nutiren is the price of phosphate and potassium (the inputs of the fertilizers).
If that’s the case better take an option on those commodities instead of looking for an indirect exposure through a company.
What you think ?
Just a few thoughts:
nestle growth : is it in CHF or USD?
Because a 2% average growth in EPS over the long term in CHF is probably at least as good as a 3% growth in USD.
The USD depreciates against the CHF over the long term.
I can t speak for the other stocks ( and I don t say that Nestle is especially a Buy at these price level), but we might see Nestle as an Equity Bond ( as Buffett often refers) : we are « very » confident of stable or slightly increasing EPS of Nestle. It can then be compared as a Swiss Bond.
Therefore, the dividend yield or the FCF yield should be compared with long term yield of swiss bonds.
Thus a possible understanding of a 18-20x PE ratio.
Of course that says nothing about if Nestle is a good risk/reward with respect to other alternatives.
excellent point! But what matters to me is the absolute return to me, don't care much to what it is compared to:-) Plus, there are things in switzerland trading at better levels with less risk, actually no USD risk compared to CHF. At the end this is an USD EUR business, not CHF...
Greeting,
great analysis. Can you do a similar analysis of maersk and hapag-lloyd shares, taking into account the strike in the U.S. They are currently quite low, so are they potentially a good investment?
Don't comment commonly but I watch all your videos
THANKS!!!
Could you simply buy the ETF MOO?
Those graphs for fertiliser prices look the exact same as the m2 money supply w/ a lag. The forward look on m2 money supply with a 18 month lag is down. My hunch is these drop as the m2 money supply lag shows up in inflation, then off to the races. If that plays out I’d be interested in circa 6 months.
Never been anything wrong for long term investors with buying cyclical stocks in a downturn. And this has always been Sven's strength. And Nutrien is pretty clearly near a historic cyclical low.
not close to a cyclical low yet :-)
What about mustgrow? Small cap with great potential being organic.
I would like to see what your exit strategy would be for cyclicals. Would you have a margin of safety while selling as well?
depends on other opportunities too
Hurricane Milton effects?
Is Coal Industry (both, thermal and coking) another cyclical industry to look into now?
will do commodities soon
Is BASF a Mosaic competitor?
dont thin so
But wasnt the peak in 22 due to geopolitical reasons ? In the stock history I checked I don't see a lot of cyclical behavior ... the stock had a run up exactly lining up with Russia Ukraine war outbreak and that makes alot of sense because russia is a big producer of these products as well and with sanctions being imposed on them the supply /demand ratios changed. Just asking if I get that right or If I'm on the wrong track here.
food inflation too, not just Russia
Hi Sven,
What do you think of K+S Aktiengesellschaft which is in the same industry?
Is it still a zombie compagny like 5 years ago?
Thanks again for your work, it is very valuable.
actually don't know, haven't looked since, but the asses are still the same likely
Looks great if they can indeed generate that much cash. Looking at mosaic, the stock barely moved historically. Riding boom and bust cycles is harder than it looks, so bagholding is real risk. What’s different now? Is your case linked to capacity in Russia falling away?
a lot has changed in the last decade in the sector
I always question myself why no buy and hold investor is talking about collecting option premiums aka cash secured puts and covered calls. Do they not know about it or what's the deal? You can make way more profit than just hold and do nothing. Or maybe no one wants to get this "secret" out. Can someone comment about this topic?
because there is also the cost of such an option, and it limits things when things move more than expected
My issue with those stocks is the capital allocation. They did massive stock buyback in 2022 when the stocks were sky high. And obviously, now the stock prices are lower, nothing...
unfortunately all businesses behave in such way... :-(((
NTR's bad PE is due to the impairment charge taken on their Brazilian operation. Is this an indictment of bad management decision making or something they couldn't have forseen and we put it as a one-off?
I appreciate your channel and I follow it, but when value investor start talking about ebitda I start to think top is in :)
hahahaah, where did I talk about it, didn't I look at FCF
@@Value-Investing 5:54, Potash adjusted ebitda sensitivity, 6:35 adjusted EBITDA..I think ebitda should not be used in any valuation calculation/estimates even less in free cash flow discussions.
Why jump into this now with BHP bringing their mine online shortly?
as discussed, part of strategy, and let's see how it works
i like more CF and CTVA (profit margins, ROE, brands, products diversification), but their valuations are higher..
i'd buy these kind of cyclical business only in a downturn economy (recession) when prices and valuations would be much lower!
until then, Energy sector speaks to me better! (at least, until 2030) ;)
What about ICL Group Ltd?
haven't looked at it now, but did a while ago and prefer these businesses
China is no longer buying US agricultural products. Did that contribute to these stocks' decline? Will that affect future profitability?
Turn the light lower or cut down on the make-up
Okay but isnt it best to invest in these while the cycle is just starting its uptrend?
yes, but keep in mind the strategy here and the diversified portfolio, for a thing with 20 positions these are already good starting points, you can't predict the cycle!
There also other competitors in the niche i like, such as icl and ipi
I didn't understand the reason why a p/e ratio of 30 is great for a commodity stock.
because when the PE ratio is high, or even negative, the company doesn't make much or any money, as it is likely showing a cycle downturn, which is the best time to buy a cyclical. More in this Peter Lynch stocks to buy overview categorization: ruclips.net/video/jw1S1V4ASQw/видео.html
Prefer a lot more ADM. Buying much cheeper I believe .
thanks for sharing!
NTR stock follows corn commodity prices...
Thanks for the video!
Have you ever analyzed Payton Planar? At first sight this stock looks not bad( enterprise value/fcf 10 %, roic and roe > 15 %, ...
If you like these fertiliser companies, maybe you‘d like Altius Minerals, a Canadian royalties company having 1/3 of NAV in potash…
thanks for suggesting!
@@Value-Investing also similar to your Rubis company this one is also investing in renewables as well
Wasn't the bust due to Russia's role in the worldwide potash supply? I don't know if potash was/is part of the Western sanctions due to Russia's attack on Ukraine that started in February 2022, but it could be an issue.
I like the whole "food production" as a value investment but there's other companies like LAND, FPI, BRASILAGRO on the REIT side, ADM, K&S on the farmer's supply side, NESN, UNILEVER, ... on the food processing side ... all contributing to staples
I`ve been taking a look at this company recently. I like the story, sector, future and numbers. However, it has a high PE ratio. I know PE its not "sacred", but I guess I am missing something. Can somebody give me a little help about the PE? It doesnt look like a cyclical company, but obviously I am wrong. Thanks for the video!!
Has Sven ever shared his performance against the S&P500? I can't imagine he beats it with some of his historic choices.
He did a video discussing it. He was on par with the market recently (I think 5 years) and he beat the market over the past 20 years.
Sp500 costs 0.1% in fees. Sven is much more expensive. Probably good if you manage a portfolio above 250k
since inception of the platform model portfolio the S&P 500 did around 13%, we are at around 12%. Still good, but I have made a few mistakes. I think the key factor here is whether your life strategy is value investing or indexing. I don't know what the S&P 500 will do next, I know what the businesses I own will most likely deliver!
The problem is that when you think about the S&P500, you are fixated with the past 15 years (0% rates with no inflation, 8t printed by the Fed, corporate tax cuts, ballooning debt, etc).
It is very hard to beat that. It is unsustainable. And most importantly, you invext in the next 15 years, not the past.
The S&P500 (or any other index for that matter) has historically failed to produce meaningful returns from anything above 25x Shiller P/E and it currently trades at 37x.
Why does it fail? Because in order to earn a return from a lunatic multiple, you need sustained strong growth, sustained high margins and sustained high multiples (all 3) which is very hard to accomplish over extended periods of time.
So instead of wasting your time looking at he performance of an index, it may be more productive to look for assets whose cashflows allow you to compound over time regardless of what the markets do, which is what value investors like Sven are focused on.
@@Value-Investing Appreciate the reply. My strategy is to make money and beat the index, or at least match it every year. I try not to limit myself to any particular strategy as the market doesn't operate that way. Strictly speaking, value investing should beat the market by definition, and if you can't beat the index ie find undervalued stocks, then the analysis was wrong. Too many people restrict themselves to value, dividend, growth, momentum, sector rotation tribes. In reality we should use all aspects. Thank you for your videos, I watch them as part of my wider absorption of views on the market but I also loosely track trades RUclipsrs make to see if outcomes materialise, hence my initial comment.
Can you talk about ARCO? Stock looks risky but another chance to invest in McDonalds a second time around is an interesting proposition.
thanks for suggesting!
🗽 Nutrien pays a high dividend, but Canada charges a withholding tax (25%). I don't want to aks Canada for refund. 🤔
.
In 2022, the top exporters of Fertilizers were Russia ($18.7B), Canada ($14.5B), China ($12.7B), United States ($8.19B), and Morocco ($7.92B). Isn't the 2022 jump/cycle linked to the Ukrainian-Russian war?
I bought CF instead of MOS. I already had NTR in my portfolio.
you didn’t mention that the boom in 2022 fertilizer prices were due to ru/ua war and fears of widespread impact on agricultural production and export limits. then the prices of western fertilizers companies went low due to Russia dumping fertilizers for a ridiculously cheap price. At this constellation, I dont see the mosaic and nutrien prices growing soon
stocks prices don't have to grow soon, hard to predict
I'm currently down 4.2% on my NTR after today's increase of 1.5%. What is the upside from today's price Oct 9 '24?
if you are focused on the stock going up and down I think you missed the point of this vid, and also the strategy behind it
@@Value-Investing yes, i appreciated your explanation about food cycles etc. i still want to know when to pull out. :)
This is what Canadian National Railways officials just said (highlighted the word POTASH). So IMHO Nutrien is still not a buy but I could be wrong any day. 😊
'..while sequential growth is expected, year-over-year growth will be flatter. Strong grain performance and recovering domestic intermodal volumes are tailwinds, but macroeconomic headwinds and POTASH comparisons present challenges. They are comfortable with the low end of the guidance range.'
usually when it is not the best time to buy, it often is, and when it is the best time to buy, it often isn't
@@Value-Investing it looks safer to buy after Nov 6 earnings day.
If you expect 10% return from Nestle , it will be always overpriced.
Nutrien and mosaic follow soybean and commodity prices. They are cheap right now.
Way too short, would like to know more 15min on each kompany to better understand the cycle
I have NTR and ICL.
Why ICL and not MOS?
@@afonsodeportugal I did not compare ICL and MOS and purchase ICL instead of MOS. I purchased ICL and NTR because they are potentially undervalued companies at cyclical lows. You can't own everything. I just happen not to own MOS at this time.
Both stocks are hard pass for me. I do like mosaic more than NTR. Mosaic dividend offering is a bit unsafe for me. If they cut their dividend, it can really open up their cash flow to bring down debt. Also their projections have negative revenue growth for the next three years and guidance is not soo great. I would like the stock to get below $20 for me to even to consider buying it. Need a bigger margin of safety. Buybacks are nice but just enough for me to purchase the stock at these prices.
Jacobs Extensions
I just had a look at Mosaics last quarterly report and they aren't earning income from operations. Their cash flow is generated by depreciation and foreign currency adjustment. Not a good investment.
When day the war in the Ukraine will end. Effects on fertilizer stocks and prices?
Lol I told you that it was not that smart to buy this in the middle of the hurricane..😅
CANADA!.
:-)
S&P500 is overvalued. Let's liquidate everything and move to cyclical value traps.
With CBAM in EU there will be no more use of fertilizer in 2026 with CO2 prices.