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James Li
James Li
Articles (1494)  | Author's Website |

5 Agricultural Companies Gurus Agree On

Stocks to consider as China starts purchasing US agricultural products

According to the Aggregated Portfolio, a GuruFocus Premium feature, five agricultural companies that gurus agree on as of Dec. 20 are Corteva Inc. (NYSE:CTVA), CF Industries Holdings Inc. (NYSE:CF), FMC Corp. (NYSE:FMC), The Scotts Miracle Gro Co. (NYSE:SMG) and Nutrien Ltd. (NYSE:NTR).

U.S. market gets early Christmas present as U.S.-China trade deal strengthens

On Friday, the Dow Jones Industrial Average closed at 28,455.09, up 78.13 points from Thursday’s close of 28,376.96, on talks that China has started purchasing U.S. agriculture products and that the two countries are close to signing “phase one” of their trade deal. Likewise, the Standard & Poor’s 500 index closed at 3,221.23, a new record close and closing higher for the fourth week in a row.


President Donald Trump said in a tweet that he and Chinese President Xi Jinping had a “very good” talk concerning the trade deal and that China has started “large scale” purchases of U.S. agriculture products. The two countries expect to formally sign the trade deal according to the tweet; further, U.S. Treasury Secretary Steven Mnuchin said the countries might sign the deal in January 2020.

As such, investors might seek good opportunities in agriculture companies ahead of Christmas and New Year’s. The Most Broadly Held portfolio has outperformed the benchmark over the past five years, with an annualized return of over 14% during the period according to our model portfolios page.


Thirteen gurus own shares of Corteva with a combined weight of 4.04%. Barrow, Hanley, Mewhinney & Strauss has the largest stake with 26,656,900 shares.


Corteva represents the agricultural business of DowDuPont, which separated into three standalone businesses on June 3. The Wilmington, Delaware-based company said on Oct. 31 that net sales for the September quarter declined 2% year over year, driven by unfavorable shifts in crop protection sales in Latin America despite strong sales in North America.

According to GuruFocus, Corteva’s debt ratios are outperforming over 69% of global agriculture companies, suggesting good financial strength. However, due to the limited data, GuruFocus does not compute a financial strength rank for Corteva.

CF Industries

Eleven gurus own shares of CF Industries with a combined weight of 2.41%. The T Rowe Price Equity Income Fund (Trades, Portfolio) has the largest holding with 3.92 million shares.


The Deerfield, Illinois-based company produces and distributes nitrogen fertilizers through seven facilities across the U.S. GuruFocus ranks the company’s profitability 8 out of 10 on the heels of a high Piotroski F-score of 7 and operating margins that outperform 91.24% of global competitors despite contracting over the past five years.



Nine gurus own shares of FMC with a combined weight of 7.75%.


The Philadelphia-based company primarily produces crop chemicals, though it also produces lithium products. GuruFocus ranks FMC’s profitability 8 out of 10 on several positive investing signs, which include a return on equity that outperforms 82.38% of global competitors and a three-year revenue growth rate that outperforms 90.59% of global competitors. Additionally, FMC’s operating margin has increased approximately 13% per year on average over the past five years and is outperforming over 91% of global agricultural companies.


Scotts Miracle Gro

Nine gurus own shares of Scotts Miracle Gro with a combined weight of 1.85%.


The Marysville, Ohio-based company provides gardening and lawn care products in the U.S. GuruFocus ranks the company’s profitability 8 out of 10 on several positive investing signs, which include margins and returns that outperform over 76% of global competitors. Despite this, Scotts’ financial strength ranks just 4 out of 10 on warning signs that include a debt-to-equity ratio that underperforms over 90% of global competitors due to the increase of long-term debt over the past three years.



Seven gurus own shares of Nutrien with a combined weight of 4.80%.


The Saskatoon, Saskatchewan-based company produces crop nutrients like nitrogen, potash and phosphate. GuruFocus ranks Nutrien’s profitability 8 out of 10 on several positive investing signs, which include a strong Piotroski F-score of 7 and net margins that outperform over 93% of global competitors.


Disclosure: No positions.

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About the author:

James Li
I am an editorial researcher at GuruFocus. I have a Master's in Finance from SMU, and I enjoy writing reports on financial trends and investor portfolios. Follow me on Twitter at @JamesLiGuru!

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