CF Industries Holdings (CF): Stock With Unusual Social Activity

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified CF Industries Holdings ( CF) as an unusual social activity candidate. In addition to specific proprietary factors, Trade-Ideas identified CF Industries Holdings as such a stock due to the following factors:

  • CF has 17x the normal benchmarked social activity for this time of the day compared to its average of 4.35 mentions/day.
  • CF has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $163.7 million.

Identifying stocks with 'Unusual Social Activity' tends to be a valuable process for traders looking to capitalize on the 'talk of the town' stocks that are basking in far more attention from the StockTwits financial community than normal. Good press? Bad press? It ultimately doesn't matter if it's good or bad if you know how to trade around the sentiment. Certain hedge funds use such data for their proprietary algorithms and it is not uncommon to see shared social sentiment play itself out in a stock's price trend.

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More details on CF:

CF Industries Holdings, Inc. manufactures and distributes nitrogen fertilizers and other nitrogen products worldwide. The company's principal nitrogen fertilizer products include ammonia, granular urea, and urea ammonium nitrate solution. The stock currently has a dividend yield of 2.1%. CF has a PE ratio of 10.7. Currently there are 7 analysts that rate CF Industries Holdings a buy, 1 analyst rates it a sell, and 5 rate it a hold.

The average volume for CF Industries Holdings has been 631,700 shares per day over the past 30 days. CF has a market cap of $13.9 billion and is part of the basic materials sector and chemicals industry. The stock has a beta of 1.15 and a short float of 3.7% with 3.55 days to cover. Shares are up 6.5% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates CF Industries Holdings as a buy. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, solid stock price performance, largely solid financial position with reasonable debt levels by most measures, notable return on equity and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Net operating cash flow has significantly increased by 517.86% to $231.70 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 -24.91%.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. 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.
  • Even though the current debt-to-equity ratio is 1.09, it is still below the industry average, suggesting that this level of debt is acceptable within the Chemicals industry. Despite the fact that CF's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.32 is high and demonstrates strong liquidity.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to other companies in the Chemicals industry and the overall market on the basis of return on equity, CF INDUSTRIES HOLDINGS INC has underperformed in comparison with the industry average, but has greatly exceeded that of the S&P 500.
  • 44.25% is the gross profit margin for CF INDUSTRIES HOLDINGS INC which we consider to be strong. 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 19.58% compares favorably to the industry average.

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