Nutrien: Low-Cost Producer of Potassium and Nitrogen Fertilizers

Steven Gorelik of Firebird Management presented his in-depth investment thesis on Nutrien (US: NTR) at Best Ideas 2021.

Thesis summary:

Nutrien is a vertically integrated fertilizer producer formed in 2018 as a result of a merger of Agrium and Potash Corp. Today, Nutrien is one of the lowest-cost producers of potassium and nitrogen-based fertilizers, benefiting from unique geology and low price of North American natural gas.

Unlike other commodity companies that tend to misallocate capital, Nutrien is investing incremental cash into value-accretive expansion of its global retail network. While fertilizer prices are near multi-year lows, increasing demand and tailwind from the weakening US dollar should bring them back to the historical averages.

Steve estimates that Nutrien trades at a 25% normalized free cash flow yield and is worth at least double the recent market price.

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About the instructor:

In addition to being Head of Research at Firebird Management, Steve Gorelik is the Lead Fund Manager of Firebird U.S. Value Fund as well as portfolio manager of Firebird’s Eastern Europe and Russia Funds. He joined Firebird in 2005 from Columbia University Graduate School of Business while completing education from a highly selective Value Investing Program. Prior to business school, Steve was an operational strategy consultant at Deloitte working with companies in various industries including banking, healthcare, and retail. He holds a BS degree from Carnegie Mellon University as well as a CFA (chartered financial analyst) charter and a membership in Beta Gamma Sigma honor society. Steve serves on the boards of Georgia Beverage Holdings (Georgia), Arco Vara (Estonia), and Pharmsynthez (Russia). He speaks Russian, English and his native Belarussian.

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