Editor's Note: 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. 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 solid stock price performance, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, expanding profit margins and increase in net income. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.
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- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- CF's debt-to-equity ratio is very low at 0.27 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.62, which clearly demonstrates the ability to cover short-term cash needs.
- Net operating cash flow has significantly increased by 240.30% to $421.30 million when compared to the same quarter last year. In addition, CF INDUSTRIES HOLDINGS INC has also vastly surpassed the industry average cash flow growth rate of 9.59%.
- The gross profit margin for CF INDUSTRIES HOLDINGS INC is rather high; currently it is at 51.10%. Regardless of CF's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CF's net profit margin of 31.77% significantly outperformed against the industry.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Chemicals industry average. The net income increased by 7.2% when compared to the same quarter one year prior, going from $438.90 million to $470.70 million.
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