When I was boy growing up in a small city in Eastern North Carolina in the very center of the world's tobacco growing region I would watch commercials on WNCT from Greenville North Carolina about Smith-Douglass fertilizer. At one time, Smith-Douglass was public traded company on the New York Stock Exchange. It has since been acquired, probably at least 30 years ago, by a larger company, probably an S&P 500 company, looking to monopolize its hold on fertilizer production (and therefore guarantee the ability to charge farmers ever increasing prices).
One would view the fertilizer industry as a slow but Steady Eddy sector. The companies pay dividends which institutional money managers like (they're not going out of business by any stretch of the imagination) because they can put that free money to risk into enterprises that can generate greater returns on invested capital.
I found this snippet of info from Seeking Alpha interesting:
Commodities
Food concerns
As wheat and corn futures continue to surge, and fertilizer prices ride the commodity boom, some investors are reaping big gains. Compared with the nearly 6% YTD loss of the S&P 500, shares of the top three U.S.-listed fertilizer producers are having a great year. Mosaic (NYSE:MOS) is up a staggering 70%, CF Industries (NYSE:CF) is ahead by 50%, while Nutrien (NYSE:NTR) is up 40% - and the first quarter is not even finished yet.
Not all is well: The fertilizer shortage comes at a time when Northern Hemisphere producers are preparing for spring planting, according to Ben Maddox, Director of Farm Operations for AcreTrader. That could reduce crop yields across the board, with some farmers not even able to get their hands on fertilizer. Supply shortages continue for ingredients like nitrogen, phosphate and potash, while the crisis in Ukraine is compounding the problem, throwing a wrench into global food supply.
"With regards to food shortages, it's going to be real," President Biden declared after meeting with NATO allies in Brussels, adding that Russia and Ukraine are the breadbasket of Europe. "The price of these sanctions is not just imposed on Russia, it is imposed on an awful lot of countries as well, including European countries and the U.S." Biden also related that the G7 had discussions on ways to "increase and disseminate more rapidly" grain from America and Canada, while European nations were urged to end limitations on sending food abroad.
Outlook: "This is a really big deal, because when that volume of calories comes out of the food chain, it triggers other things. Not only hunger, but unrest," AGCO (NYSE:AGCO) CEO Eric Hansotia told CNBC. "The last time we had this kind of disruption, it was one of the major triggers for the Arab Spring, and it's because a lot of this food goes to areas like North Africa, the Middle East, or places where the cost of food is a large portion of the income of that population." (8 comments)
My takeaway:
As much as I detest my sister's husband (he did about next to nothing for almost 20 years waiting for his rich mother to die so he could get his cut) he did provide me with an insight that I like to call Biology 100: "Everybody's hungry."
I find it ironic that those three boring companies, around for more than a generation, which have done so well in the past 12 months while this Cathie Wood and her Ark Fund concentrated on disruptive technology, inflation flighting companies have pretty much gone down the toilet.
Cathie Wood has recently said, "give me another five years and I will be back on top."
That could very well happen. She will be 70 years old. After all, Warren Buffett is somewhere in his 90s and his partner Charles Munger is age 98. As it has often been said, it is not so much a matter of timing the market as it more a matter of time in the market.
