4. CF Industries Holdings (CF), a manufacturer and distributor of nitrogen and phosphate fertilizer products, operates in two segments: nitrogen and phosphate fertilizers. The company's market and distribution facilities are concentrated in the Midwestern grain-producing states, and other agricultural areas of the U.S. and Canada. As of Dec. 31, 2010, CF sold 11.5 million tons of nitrogen fertilizers and 1.9 million tons of phosphate fertilizers.
In April 2010, the company completed its $4.7 billion merger deal with Terra Industries, the second-largest player in nitrogen fertilizers. The CEO believes that the merger has proved decisive for the company.
Terra Nitrogen Company, a wholly owned subsidiary of CF Industries Holdings, reported full-year 2010 net earnings of $201.6 million on sales of $564.6 million against net earnings of $144.3 million on sales of $507.7 million in 2009. For the fourth quarter, the company paid a dividend of $1.36 per share.Meanwhile, the company's cash and cash equivalents multiplied several times to $124.8 million from $24.8 million in 2009, on record crop prices and strong food demand. CF recorded sales of $3.96 billion in 2010 compared to $2.61 billion in the previous year. Looking ahead, Fitch believes that 2011 could be a good year for CF as low natural gas prices will combine with strong demand for nitrogen and phosphate-based fertilizers to produce a record cash flow. Also, rising demand in less-developed economies, high grain prices and the high corn-for-ethanol production in the U.S. will support the company's profitability levels. Meanwhile, cash flow after capital expenditure will exceed $1.5 billion. Of the 18 analysts covering the stock, 61% recommend a buy on it while 33% suggest a hold. Analysts polled by Bloomberg expect the stock to gain an average 14.2%, to $156.2, in the upcoming 12 months.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV