Fund Manager Summary
The fund managers believe that the outlook for Nufarm Ltd presents a significant opportunity despite recent challenges. They note that the company has experienced a decline in share price due to drier weather conditions and a reduction in on-farm purchases by farmers, which has led to a contraction in demand for crop protection products. However, in their opinion, Nufarm's performance has been relatively strong compared to its peers, which faced negative earnings impacts of 20% or more. They highlight that Nufarm is a higher quality business than in previous years, with ongoing enhancements to its crop protection segment through high-margin proprietary formulations. Furthermore, the seeds division is expected to drive strong earnings growth with the commercialization of innovative traits like Omega-3 and Carinata.
Source: Trading View
Commentary From The Managers
Subscribe To Unlock
Date
Price
Summary
Unlock Recent Updates With ThesisTracker Pro
Don’t let information asymmetry undermine your investment returns. Join other engaged investors on ThesisTracker Pro.
Asymmetric Asset Management
31 May 2025
$2.28
Summary
- Asymmetric Asset Management remains cautious about investing in the agriculture sector due to first-hand experience.
- Nufarm Ltd’s shares dropped by 38% after reporting first-half results that did not meet market expectations.
- The decline was primarily due to an Omega-3 inventory write-down that accounted for the shortfall.
- Despite the market's negative outlook, Asymmetric Asset Management believes the market's view of Nufarm's future is overly pessimistic.
- The recent sell-off was seen as a buying opportunity for the fund manager.
- However, the stock continued to decline, leading to a situation where the Seeds division implied a zero value in the share price.
Text:
Text:
Text:
Summary
-
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua, ut enim ad minim veniam.
-
Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat, sed ut perspiciatis unde omnis iste.
-
Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur, at vero eos et accusamus et iusto odio dignissimos.pedita.
Text:
Text:
Text:
Summary
-
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua, ut enim ad minim veniam.
-
Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat, sed ut perspiciatis unde omnis iste.
-
Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur, at vero eos et accusamus et iusto odio dignissimos.pedita.
Text:
Text:
Text:
Summary
-
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua, ut enim ad minim veniam.
-
Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat, sed ut perspiciatis unde omnis iste.
-
Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur, at vero eos et accusamus et iusto odio dignissimos.pedita.
Text:
Text:
Text:
Summary
-
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua, ut enim ad minim veniam.
-
Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat, sed ut perspiciatis unde omnis iste.
-
Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur, at vero eos et accusamus et iusto odio dignissimos.pedita.
Updates are made available to members within 12 hours in accordance with the ThesisTracker Pro Service Level Agreement.
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
Asymmetric Asset Management
31 May 2025
$2.28
- Asymmetric Asset Management remains cautious about investing in the agriculture sector due to first-hand experience.
- Nufarm Ltd’s shares dropped by 38% after reporting first-half results that did not meet market expectations.
- The decline was primarily due to an Omega-3 inventory write-down that accounted for the shortfall.
- Despite the market's negative outlook, Asymmetric Asset Management believes the market's view of Nufarm's future is overly pessimistic.
- The recent sell-off was seen as a buying opportunity for the fund manager.
- However, the stock continued to decline, leading to a situation where the Seeds division implied a zero value in the share price.
Summary
L1 Capital
31 Dec 2023
$5.29
- Seed technologies segment within Nufarm Group has achieved a CAGR of 49% p.a. over the past three years.
- This segment now accounts for 20% of group earnings.
- Nufarm aims to grow EBITDA in this segment to ~$150m by FY26 and over ~$400m by FY30.
- A significant driver of growth is the proprietary Omega-3 seed technology.
- This technology offers a sustainable and scalable solution to meet the increasing Omega-3 demand from the fish farming industry.
Summary
L1 Capital
31 Oct 2023
$4.33
- Nufarm (Long -9%) shares have declined alongside global agriculture peers due to adverse weather conditions.
- A decrease in on-farm purchases by farmers has been observed, shifting from inventory build-up during COVID-19 to just-in-time purchasing.
- Significant contraction in demand for crop protection products, especially in North America, is noted as inventories are adjusted.
- Nufarm announced a ~5% downgrade to EBITDA guidance for FY23, reflecting the challenging operating environment.
- This performance is considered relatively strong, especially compared to peers experiencing negative earnings impacts of >20%.
- L1 Capital views Nufarm as a higher-quality business than in previous years.
- The company is enhancing its crop protection operations with high-margin, high-growth proprietary formulations.
- Nufarm’s seeds business is commercializing innovative traits like Omega-3 and Carinata, aiming for strong earnings growth.
Summary
L1 Capital
30 Sept 2023
$4.73
- Nufarm shares have declined along with global agriculture peers due to drier weather conditions.
- There has been a reduction in on-farm purchases by farmers.
- Farmers are shifting to just-in-time purchasing for key crop inputs as prices fall and supply chains normalise.
- This shift has led to a significant contraction in demand for crop protection products, especially in North America.
- Nufarm announced a ~5% downgrade to EBITDA guidance for FY23 due to the challenging operating environment.
- L1 Capital views this as a relatively strong performance given major industry headwinds, which are considered transitory.
- Nufarm has much higher quality business attributes compared to a few years ago.
- The company is enhancing its crop protection business with high-margin, high-growth proprietary formulations.
- Nufarm’s seeds business has commercialised exciting traits like Omega-3 and Carinata, expected to drive strong earnings growth.
Summary
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
ANALYST INSIGHT
Equity Research Analyst
In a landscape of agricultural uncertainty, resilience shines through. Nufarm Ltd. appears to navigate challenges with a strategic edge, leveraging innovation in crop protection and seeds to position itself for future growth, despite current headwinds.
Last Updated: 31 May 2025
Query The Data
Frequently Asked Questions
Who is investing in Nufarm Ltd (ASX:NUF)?
Fund managers including L1 Capital and Asymmetric Asset Management have invested in Nufarm Ltd (ASX:NUF).
Why do fund managers invest in Nufarm Ltd?
Fund managers are investing in Nufarm Ltd due to its resilience in a challenging agricultural environment, characterized by a temporary decline in demand for crop protection products. Despite a recent EBITDA downgrade, Nufarm's performance is viewed favorably compared to peers facing greater earnings impacts. The company's strategic focus on high-margin proprietary formulations and the successful commercialization of innovative seed traits, such as Omega-3 and Carinata, positions it for strong future growth, enhancing its appeal as a quality investment.
What happened to Nufarm Ltd (ASX:NUF)?
There have been no recent updates from fund managers regarding Nufarm Ltd although fund managers including L1 Capital and Asymmetric Asset Management have previously commented.