CF Industries Holdings Inc Stock Buy Recommendation Reiterated (CF)

NEW YORK (TheStreet) -- CF Industries Holdings (NYSE:CF) has been reiterated by TheStreet Ratings as a buy with a ratings score of A- . The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

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Highlights from the ratings report include:

• The revenue growth greatly exceeded the industry average of 2.2%. Since the same quarter one year prior, revenues rose by 30.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
• The current debt-to-equity ratio, 0.33, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, CF has a quick ratio of 1.74, which demonstrates the ability of the company to cover short-term liquidity needs.
• The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. When compared to other companies in the Chemicals industry and the overall market, CF INDUSTRIES HOLDINGS INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
• The gross profit margin for CF INDUSTRIES HOLDINGS INC is rather high; currently it is at 53.40%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 24.10% significantly outperformed against the industry average.
• Powered by its strong earnings growth of 41.68% and other important driving factors, this stock has surged by 27.12% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, CF should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.

CF Industries Holdings, Inc., through its subsidiary, CF Industries, Inc., manufactures and distributes nitrogen and phosphate fertilizer products, serving agricultural and industrial customers worldwide. It operates in two segments, Nitrogen and Phosphate. The company has a P/E ratio of 7.8, below the average chemicals industry P/E ratio of 8.6and below the S&P 500 P/E ratio of 17.7. CF has a market cap of $13.35 billion and is part of the basic materials sector and chemicals industry. Shares are up 42.1% year to date as of the close of trading on Tuesday.

You can view the full CF Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

 

For more information on CF Industries Holdings Inc click any of the following:

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