The Price At Which I’ll Repurchase FMC

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Summary

In 2016/2017 I made a very successful FMC investment.

FMC’s price action during the 2018 correction provided evidence that the stock will likely offer another opportunity for big profits during the next downturn.

This article uses FMC’s historic price cyclicality to estimate a good entry point for FMC and backtests the results one would have had during FMC’s 3 previous downturns.

Looking for more? I update all of my investing ideas and strategies to members of The Cyclical Investor’s Club.

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Introduction

For over three years now I’ve specialized in writing about highly cyclical stocks. Way back in 2016, FMC Corp (FMC) was one of the very first stocks I wrote about using a cyclical value analysis, and in my April 1, 2016, article“Cyclical Strategy Says Buy FMC” I explained why I was buying the stock and why I thought it had the potential to return 100% within a few years’ time. After 15 months, here is how the investment idea had performed.

The chart above was taken from my Aug. 3, 2017, follow-up article “FMC Corp – A Successful Cyclical Investing Case Study” in which I shared that I was taking profits in the investment I wrote about in 2016.

Over the past two years, FMC has made some successful divestitures, including spinning off their lithium business, making it a more streamlined agriculture chemicals business. Generally speaking, those moves seem to be good. Here is how the stock has performed versus the S&P 500 index since I sold my shares in 2017.

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