Differentiating between short-term and long-term investment trends is something every investor ought to do, particularly those focused on finding value in the stock market. By default, most value picks are companies which are unloved by the market in the short term, for reason or another.
Therefore, ignoring the short-term ailments of a particular company and focusing on the long term upside instead is a necessary strategy value investors need to employ to be successful. They need to hold their position in a long enough time frame to generate a profit.
Nutrien Ltd. (TSX:NTR)(NYSE:NTR) is a company that certainly falls into the value category currently. The company is down approximately 25% on a year over year basis, at the time of writing, reflecting negative sentiment around the supply and demand fundamentals of the fertilizer commodities supplied by Nutrien.
These market fundamentals may continue to hamper Nutrien over the short term. Those pointing to a longer term macro drivers note the premiere market position of Nutrien as a key reason to stick with the company and nibble at these depressed stock price levels.
Long term, rising agricultural demand is likely to allow for revenue and earnings growth, which will be enhanced with price increase by Nutrien as the company leverages its position as a global leader in the production of some of its core products.
The company’s retail position also remains a strength and a focal point for investors, providing some near term optimism despite an otherwise broadly bearish view of Nutrien by the market today.
Invest wisely, my friends.
