Insights: Bullish Fertilizer Stocks
Ask any technician which ingredients they would desire to see while a commodity-based industry formed a bottom, and you'll likely (or should) hear the following:1. Bottom patterns in the stocks in focus, obviously.
2. Similar patterns in the underlying commodity.
3. Bearish sentiment.
• This technical triune was present when many of last year's leaders bottomed: Brazil, copper stocks, energy, Macau casinos, steel, etc.
• These ingredients are currently present in the fertilizer industry: (1) names like MOS and POT are breaking out from bottoms; (2) grain commodities exhibit similar patterns; (3) and the Street's general consensus remains bearish. Accordingly, we view this Group as an attractive contrarian theme and recommend increasing exposure to the names highlighted within.
• Charts highlighted: AGU, AKZA-NL, CF, ICL, MOS, POT, SQM, YAR-NO, corn, wheat, and soybeans
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Agriumis a retailer of agricultural products and services in the U.S., Canada, Australia, Argentina, Brazil, Chile and Uruguay and a producer and wholesale marketer of nutrients for agricultural and industrial markets. Co. reported its business through two business units, Retail, which operates in North and South America and Australia, providing crop inputs and services directly to farmers; and Wholesale, which operates in North and South America and Europe, and produces, markets and distributes all major crop nutrients for agricultural and industrial customers both domestically and around the world.
Vermilion Research delivers timely, actionable, and unique research inputs to professional investors. Our research strategists highlight securities which we believe are at major inflection points, based on our various proprietary technical indicators, and offer asymmetric risk/return profiles. We believe our research methodology, which is not limited by industry sector or market capitalization, enables us to deliver superior investment recommendations.
Our process begins by organizing all actively traded stocks into coherent sectors, then into logical industry groups. We then apply our proprietary relative strength tools to identify developing price trends. Once attractive trends are identified within a selected sectors or groups, we screen for individual stocks which we believe offer the best risk/reward profile. Vermilion offers U.S. and global equity market research products. Vermilion’s research team, which has received numerous awards and accolades, has a combined 70 year of experience in the analysis of investment securities.
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