The Canadian stock market has been no stranger to volatile conditions in 2022. The S&P/TSX Composite Index has gone up and down several times over the last few months. As of this writing, the Canadian benchmark index is down by 10.2% from its 52-week high. While it is not a full-blown market crash, the equity market does seem like it will remain volatile to round off the year.
Market downturns can be scary, especially since many of the top TSX stocks tend to suffer. However, investors can use the broader decline as an opportunity to find and invest in high-quality stocks trading at discounts. Despite a track record of volatility, a few names might warrant a position in investor portfolios. Nutrien Ltd. (TSX:NTR) is one such stock to consider.
From soaring to all-time highs to being on a roller coaster and dropping in recent weeks, let’s look at why Nutrien stock is an asset I would still have in my portfolio.
An industry game-changer
Nutrien stock is an excellent asset to consider if you want to invest in a game-changing company in its industry. For the longest time, the agriculture industry in Canada was quite fragmented. With its organic and acquisition-based growth in recent years, Nutrien has consolidated the industry.
Through the tremendous work it has done over the years, Nutrien stock has effectively improved how farmers and companies purchase essential nutrients for their crops.
However, volatility came along due to events occurring elsewhere in the world. Russia’s invasion of Ukraine has had a significant impact on global economies across several industries. While the energy industry’s woes have taken the forefront, global agriculture has also suffered due to the resulting sanctions.
Russia is one of the world’s largest and cheapest potash producers. The sanctions resulted in a greater amount of business moving to Nutrien.
The sudden shift saw Nutrien stock soar to all-time highs of around $148, up from $87 at the start of 2022. While a growing valuation is generally good news, Nutrien stock flew too high too fast. Its unsustainable growth inevitably pointed toward a decline.
The decline
And it did not take long for the downturn to come along. As the markets became increasingly volatile, the broader market decline saw a sell-off across the board, including Nutrien stock. The company’s fundamentals did not change much. However, the Nutrien share price fell on the stock market regardless of major developments.
Peak to trough, Nutrien stock declined by almost 36% between April 18 and July 14, 2022. After that, the stock started gradually recovering before another steep decline a few weeks ago after the company missed its earnings targets. As of this writing, Nutrien stock trades for $104.80 per share, down by almost 30% from its all-time high.
Foolish takeaway
Shrugging off its earnings estimate miss, Nutrien stock produced record results for its third quarter of fiscal 2022. Potash continues to attract significant demand, and the company is expected to deliver stronger results in the coming quarters.
Despite all the volatility right now, Nutrien stock looks well-positioned to exhibit stellar growth in the coming months. Today could be a favourable time to establish a position in the volatile agriculture stock.
