The TSX remains a volatile place for investors, even those seeking a deal from strong companies. It can be unclear as to whether a company is going to recover sooner as opposed to later — especially when you’re looking at a company that has a volatile past, such as Nutrien (TSX:NTR).
Nutrien stock has had quite the volatile year, with shares soaring to all-time highs and then dropping off. But, honestly, Nutrien stock is one volatile stock I’ll buy again and again.
Here’s why.
A stable growth path
Nutrien stock has been touted for years as a strong choice among investors. That’s because the company has seen a stable path to growth, both organically and through acquisitions. Nutrien stock has been merging a fractured industry, while also upgrading the way farmers and companies purchase crop nutrients.
Yet it wasn’t until this year that some volatility came to the company. It came, of course, when Russia invaded Ukraine. This invasion came with a number of sanctions, which included crop nutrients. Russia has been a cheap producer of potash, so the sudden sanctions left more business to Nutrien stock.
However, this led to shares soaring to all-time highs at $148 from around $87 at the beginning of the year. This was an unstable situation that was going to come crashing down.
And a crash came
With the market becoming more volatile, Nutrien stock experienced a selloff with prices at all-time highs. The returns were too tempting. Even though there wasn’t any change in the amount it was selling, its acquisitions, or anything related to its business model, it still fell.
This led Nutrien stock to fall by 36% from peak to trough, before climbing slowly upwards again. Even today, shares are up just by about 14% as of writing. This comes with inflation and interest rates still affecting the company, along with the rest of the world.
However, is the fall warranted? Or are investors missing out on an opportunity?
You’re missing out
Even when Nutrien stock traded at 52-week highs, the stock was still a deal when it came to its price-to-earnings ratio. Furthermore, it’s of major value today, trading at just 5.79 times earnings as of writing. And analysts agree, despite the earnings miss this month.
Nutrien stock missed estimates but still produced record earnings for the third quarter. It also expects to see even more growth throughout 2023, not just because of Russian sanctions but also with lower Ukrainian grain exports as well. Yet missing estimates led to some analysts lowering its potential target price.
But not all of them. Some other analysts actually upgraded the stock because of the bull thesis regarding nitrogen. Plus, potash continues to be in major demand, and North and South American production is expected to continue climbing in 2023 and beyond.
Bottom line
Nutrien stock is in a prime position to continue growing out of 2022, into 2023, and far into the future. We need to eat, and Nutrien continues to acquire businesses to create a powerhouse of potash and crop nutrient production. You can buy Nutrien stock for a superior deal, with a 2.45% dividend yield as icing on the cake. And if shares quickly recover to pre-drop prices, that’s a potential upside of 37% as of writing! So, yes, I’ll be buying up this volatile stock over and over again.
