We recently compiled a list of the 13 Best Farmland and Agriculture Stocks To Invest In According to Hedge Funds. In this article, we are going to take a look at where Nutrien Ltd. (NYSE:NTR) stands against the other farmland and agriculture stocks.
Revolutionizing Agriculture: Technology in Modern Farming
The farmland and agriculture sector is crucial for global food security and economic stability. As the world population continues to grow, the demand for food increases, necessitating innovative practices in agriculture and farming. Recent trends indicate a significant shift towards technology-driven agriculture, which aims to enhance productivity while promoting sustainability.
In the first quarter of 2024, McKinsey surveyed around 4,400 farmers across Europe, India, Latin America, and North America to understand the factors influencing their profitability and technology adoption. The firm conducted a similar survey in 2022. The findings indicate that while farmers are increasingly adopting technology, the pace remains slow, with a three-percentage-point rise since 2022 in those using or willing to use at least one new digital tool to improve operations.
READ ALSO: 8 Best Fertilizer Stocks To Buy Now and 10 Stocks with Consistent Growth to Buy.
North American farmers lead in technology adoption. In the US, 61% of farmers are using or willing to adopt digital agronomy. Additionally, 51% are using or willing to adopt precision agriculture hardware, and 38% are adopting remote-sensing technologies. Latin America showed the most significant growth in technology adoption, with a remarkable ten-percentage-point increase from 2022 to 2024. Farmers around the world are more inclined to adopt new technologies that directly improve operations. According to the data, digital agronomy and precision agriculture hardware are the most popular technologies around the world.
The survey highlights that in the US, larger farms are 45% more likely to adopt agricultural technology compared to smaller farms. This trend can be attributed to the greater scale needed for a favorable return on investment (ROI) in agtech. Despite the challenges posed by rising input costs and extreme weather conditions, farmers are looking towards sustainable practices and innovative technologies to enhance their productivity and profitability. Organizations that provide technology and services have a unique opportunity to cater to farmers’ diverse needs across different regions.
Our Methodology
To compile our list of the 13 best farmland and agriculture stocks to invest in according to hedge funds, we used the Finviz and Yahoo stock screeners to find the largest farmland and agriculture companies. We also reviewed our own rankings and consulted various online resources.
From an initial pool of more than 30 farmland and agriculture stocks, we focused on the top 13 stocks most favored by institutional investors. Data for the hedge fund sentiment surrounding each stock was taken from Insider Monkey’s Q3 2024 database of 900 elite hedge funds. The 13 best farmland and agriculture stocks to invest in are ranked in ascending order based on the number of hedge funds holding stakes in them, as of Q3 2024.
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).
A bustling warehouse stocked with irrigation supplies, fertilizer, grass seed, ice melt products, pesticides, and landscape accessories.
Nutrien Ltd. (NYSE:NTR)
Number of Hedge Fund Holders: 33
Nutrien Ltd. (NYSE:NTR) is a prominent Canadian agriculture and fertilizer company, recognized as one of the world’s largest producers of potash and nitrogen fertilizers. The company plays a critical role in the agricultural sector by providing essential crop inputs and services to farmers globally.
In June 2024, during its Investor Day, Nutrien Ltd. (NYSE:NTR) set ambitious performance targets for 2026, focusing on improving earnings and cash flow. The company has made good progress and now aims to achieve $200 million in operational efficiencies by 2025, one year ahead of schedule. These efficiencies will be realized through cost reductions across both retail and corporate operations.
In the first nine months of 2024, Nutrien Ltd. (NYSE:NTR) reported an adjusted EBITDA of $4.3 billion, driven by higher retail earnings, increased fertilizer volumes, and lower operating costs. The company has already boosted sales volumes by 1.3 million tons this year through the first 3 quarters of 2024, with plans to increase potash and nitrogen production by an additional 2 to 3 million tons compared to 2023 levels.
Nutrien Ltd.’s (NYSE:NTR) strong health is further demonstrated by its commitment to returning value to shareholders. As of November 5, 2024, the company repurchased 1.5 million shares for approximately $75 million in the latter half of the year. This move reflects Nutrien’s dedication to enhancing shareholder value. The company’s strategic focus on operational efficiency and growth positions it well for future success.
Overall, NTR ranks 7th on our list of the best farmland and agriculture stocks to invest in according to hedge funds. While we acknowledge the potential of NTR 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 NTR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.