Spotlight on Nufarm

Oscar Oberg

Wilson Asset Management

Nufarm (ASX: NUF) is an undervalued agricultural crop protection company that has strong global exposure with 97% of earnings originating from outside Australia. We invested in NUF as we believed the market was incorrectly assuming that poor drought conditions in Australia and Europe would continue indefinitely. Furthermore, the share price did not include any value for NUF's exciting investment into Omega3, with regulatory approvals imminent over the course of this year. 

On Wednesday, NUF delivered its FY2019 half-year result, with earnings before interest, tax, depreciation and amortisation (EBITDA) of $121 million. While the result was in line with the market’s expectations, a poor outlook statement largely related to extended drought conditions and supply disruptions, contributed to lower-than-expected full year EBITDA guidance and elevated levels of working capital.

We believe that NUF's assets are undervalued by the market and see a significant earnings upside, should a return to normal weather conditions occur. We continue to hold NUF as a research-driven investment within WAM Capital and WAM Leaders. 

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Wilson Asset Management takes advantage of short-term mispricing opportunities in the Australian equity market, providing investors with diversified exposure to a portfolio of undervalued growth companies.

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Oscar Oberg
Lead Portfolio Manager
Wilson Asset Management

Oscar has more than 14 years’ experience in financial markets. Before joining Wilson Asset Management, Oscar worked as a sell-side Analyst at CLSA and three years’ at Grant Thornton working in transaction advisory services.

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