One of the most beaten-down stocks over the past year has been FMC Corporation (FMC +1.54%), which makes insecticides, herbicides, and many other crop protection products. In the past 12 months, the stock has cratered more than 60% as tariffs and higher costs have been weighing on its business.
The company also slashed its dividend last year amid the uncertainty around its future operations. There's been no shortage of risk around the stock of late. Some investors, however, may see a compelling opportunity to buy really low -- the stock hasn't been at these levels since 2008.
But before you decide to take a chance on the agriculture stock, you should carefully consider what management recently said when laying out its priorities for the year ahead.
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Management is exploring "strategic options"
Last month, FMC reported its year-end numbers and also discussed the year ahead. It stated that the company's Board, "has authorized the exploration of strategic options, including but not limited to, the sale of the company."
As an investor, when you hear "strategic options," that should raise flags and send alarm bells off. That's because it's not a great scenario to be in, and it opens up all sorts of uncertainty into the picture. If the company is sold, for example, then that can drastically impact your overall return as it would depend on the price it gets sold for -- assuming that ends up happening. Even if you're bullish on a long-term recovery for FMC, if the company is sold and is taken private, then any gains you make on the stock could be limited. And if the stock proceeds to fall lower and the sale price ends up being less than what you paid for it, then you could still incur a loss despite buying at such a low value.
NYSE: FMC
Key Data Points
FMC stock is nothing more than a gamble at this point
Last year was an atrocious one for FMC's business, as it announced it would be exiting India due to challenging market conditions, and it incurred a net loss of more than $2.2 billion. In the previous year, it posted a solid profit of $341.6 million. And its revenue came in at a little under $3.5 billion for the full year, which was down more than 18% from 2024, when its top line was around $4.2 billion.
The company is facing a tumultuous and uncertain road ahead, as it projects revenue and adjusted earnings to decline this year. While the stock may look cheap, it's by no means a deal. With abysmal financial results and management looking at a possible sale of the business, there's just too much risk to make FMC a compelling investment option.
