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three Fertilizer Shares Benefitting from Elevated Momentum


Assisted by a late end-of-day rally, the market closed solidly within the inexperienced yesterday and continued its ascent. Right now, issues had been just a little flat. The sturdy rally we’ve witnessed kicked off final week and has offered buyers with a extremely desired week of inexperienced and constructive momentum.

Momentum merchants make the most of developments out there, believing that shares will proceed their uptrends and result in appreciable good points. The momentum impact turns into stronger inside Zacks Rank #1 (Sturdy Purchase) or #2 (Purchase) shares because of the practically fast results of constructive earnings estimate revisions on inventory costs.

Fertilizer Momentum

Earlier than this yr, the fertilizer business was in haywire. Rising prices of pure fuel used for manufacturing, new export-licensing necessities, and extreme storms inside the U.S. utterly disrupted the business, reducing deeply into farmers’ margins and sending fertilizer costs hovering.

Issues have taken one other downwards flip with Russia’s invasion of Ukraine this yr. Russia, the world’s largest fertilizer producer, has been shunned by transport corporations refusing to dock and acquire items from the nation. Based on farmers, different sources are very pricey, inflicting the product’s provide to be slashed.

To no shock, fertilizer shares have been skyrocketing. The constructive momentum inside these corporations might be anticipated to proceed so long as earnings estimates proceed to rise and provide chain-related points proceed to cap provide.

Two essential components affecting the Momentum Model Rating embrace the inventory’s latest efficiency and the speed at which the consensus estimate pattern is rising. Let’s analyze these metrics in three fertilizer shares with a Zacks Rank #1 (Sturdy Purchase) rank and see how the businesses are benefiting from the momentum.

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Sociedad Quimica Y Minera SA

Sociedad Quimica Y Minera SA SQM is a fertilizer and iodine producer that distributes its merchandise to over 60 nations worldwide.

Yr-to-date, shares have skyrocketed by practically 66%, scorching the S&P 500’s 4.5% decline. SQM shares have displayed unimaginable energy over the past yr as nicely, ascending 64% in comparison with the S&P 500’s return of 16%. Lastly, shares have crushed the S&P 500’s return of 4% over the earlier month, rising 27% in worth.

Analysts have taken notice of the momentum and have been revising their estimates over the past 60 days, boosting present full-year earnings 26% to $4.65 per share and subsequent yr’s EPS estimate 22% to $4.16 per share. The subsequent and following quarters have seen notable will increase as nicely within the consensus estimate pattern, rising 32% to $1.05 per share and 15% to $1.06 per share, respectively. Total, there have been seven upwards estimate revisions.

SQM has a Momentum Model Rating of an A.

Sociedad Quimica y Minera S.A. Worth, Consensus and EPS Shock

Sociedad Quimica y Minera S.A. Price, Consensus and EPS Surprise

Sociedad Quimica y Minera S.A. price-consensus-eps-surprise-chart | Sociedad Quimica y Minera S.A. Quote

Nutrien LTD

Nutrien LTD NTR produces and sells fertilizer and different associated industrial feed merchandise. The corporate is headquartered in Saskatoon, Canada.

Nutrien shares have been a vibrant spot in a dim market year-to-date, rising by practically 45% in worth and much outperforming the S&P 500. Over the past yr, the return has been much more spectacular; shares have ascended virtually 100% in worth and crushed the overall market’s efficiency. Share efficiency over the past month has advised the identical story, rising 25% in worth.

Over the past 60 days, NTR’s present yr consensus estimate pattern has climbed 37% to $12.86 per share, and subsequent yr’s EPS estimate has elevated by a whopping 81% to $10.37 per share. The subsequent and following quarter’s EPS estimates have seen stable will increase as nicely, rising 4% to $2.54 per share and 11% to $4.44 per share for the next quarter. In complete, there have been 15 upwards estimate revisions on this time-frame.

NTR boasts a Momentum Model Rating of an A as nicely.

Nutrien Ltd. Worth, Consensus and EPS Shock

Nutrien Ltd. Price, Consensus and EPS Surprise

Nutrien Ltd. price-consensus-eps-surprise-chart | Nutrien Ltd. Quote

The Andersons, Inc

The Andersons, Inc ANDE is a regional grain merchandiser with diversified agriculture companies that embrace crop nutrient formulation and distribution.

Like SQM and NTR, ANDE shares have been a scorching merchandise out there year-to-date, rising 41% in worth and simply outperforming the overall market. The final yr’s efficiency is rock-solid, with shares seeing a rise of practically 93%, and over the earlier month, shares proceed to exhibit their energy by rising 20%.

Most notably, the consensus estimate pattern for the corporate has elevated by practically 61% for the subsequent quarter, boosting the quarterly estimate to $0.66 per share from $0.41 per share. One downwards estimate revision has decreased the next quarter’s EPS estimate by 8% to $0.88 per share, and current-year earnings estimates have elevated 15% to $2.63 per share. There have been three upwards estimate revisions over the past 60 days and no revisions for next-year earnings.

ANDE at the moment holds a Momentum Model Rating of C.

The Andersons, Inc. Worth, Consensus and EPS Shock

The Andersons, Inc. Price, Consensus and EPS Surprise

The Andersons, Inc. price-consensus-eps-surprise-chart | The Andersons, Inc. Quote

Backside Line

SQM, NTR, and ANDE have all obtained upwards estimate revisions over the past 60 days, pushing them right into a #1 (Sturdy Purchase) rating and giving the businesses stable Momentum Model Scores.

It’s essential to do not forget that developments are quickly altering and that what labored for buyers a month in the past might not work in any respect a month from now. Merely put, momentum investing depends on being versatile sufficient to pivot to names at any given time to seize the transfer at its earliest level.  

Thankfully, we will make the most of the Zacks Rank and Model Scores to alleviate this downside and supply a clearer image since estimate revisions are one of the highly effective forces impacting inventory costs.

Resulting from present situations and developments, I consider that every one three corporations present glorious alternatives for momentum buyers making an attempt to catch some good points. Nevertheless, estimate revisions must maintain rising for these corporations to retain their momentum, so buyers ought to heed warning and double-check rankings earlier than buying.

Simply Launched: Zacks’ 7 Greatest Shares for Right now

Consultants extracted 7 shares from the checklist of 220 Zacks Rank #1 Sturdy Buys that has overwhelmed the market greater than 2X over with a surprising common achieve of +25.4% per yr.

These 7 had been chosen due to their superior potential for fast breakout. 

See these time-sensitive tickers now >>

Click on to get this free report

The Andersons, Inc. (ANDE): Free Inventory Evaluation Report

Sociedad Quimica y Minera S.A. (SQM): Free Inventory Evaluation Report

Nutrien Ltd. (NTR): Free Inventory Evaluation Report

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The views and opinions expressed herein are the views and opinions of the creator and don’t essentially replicate these of Nasdaq, Inc.



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