For many Canadian investors, the thought of owning a commodity-specific stock may be simply too much to fathom after years of commodity price declines and sector-wide disarray. The potash sector is no different, and industry leading Nutrien Inc. (TSX:NTR)(NYSE:NTR) has certainly felt its fair share of pain of late.
Since launching under its new name at the beginning of this year, shares of Nutrien have only now returned to their launch price - a lost year for investors hoping for better things in the fertilizer business.
Nutrien does yield more than 3%, so there's that. But investors with a long-term perspective such as myself may be more focused on the growth potential of potash in the developing world - a trend which has not necessarily panned out as expected for many investors who have watched consumption rise, albeit at a slower rate than production.
The issue Nutrien has had, as with all potash producers, is there is too much supply on the market currently, resulting in depressed prices for the global commodity.
Nutrien has certainly done its part to attempt to curtail this supply issue and battle increasing production costs, recently announcing the permanent closure of the company's New Brunswick facility.
The company will take a writedown of $1.8 billion U.S. on the move, but investors will be keeping an eye on how this move should reflect an improving cost structure long-term for the company, perhaps providing a boost to future cash flows in the quarters to come.
Invest wisely, my friends.
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