CF Industries Holdings Inc

The number of companies in the fertilizer market is low, but these stocks have seen significant price increases. What are the top fertilizer stocks?

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Phosphate fertilizer prices are key to Mosaic’s (MOS) Phosphate segment’s sales, earnings, and stock price.

In 2013, about 54% of global ammonia was upgraded to urea, according to FERTECON. But urea prices have rebounded from their lows at the beginning of 2016.

Like CF Industries’ (CF) sales, its margins are also expected to expand YoY (year-over-year) in Q2 2018 and the next four quarters.

For the week ending October 28, the overall movement in urea prices was flat to positive. Granular urea prices rose 6.6% to $211 per metric ton in China.

Of the 22 analysts surveyed, about 32% of them gave Mosaic (MOS) a “buy” rating. About 41% of analysts issued a “hold” rating, and only 27% issued a “sell” rating.

The week ending March 24, 2017, was broadly negative for agricultural fertilizer stocks. The VanEck Vectors Agribusiness ETF (MOO) fell 0.98%.

Last week was mostly negative for agricultural fertilizer (FXZ) stocks. However, the VanEck Vectors Agribusiness ETF (MOO) ended the week in positive territory.

According to CF Industries, nitrogen prices could remain under pressure as new capacities come online in 2017. However, the company believes that things should improve in 2018.

Generally, a capacity increase tends to lag demand growth, as producers like to see a stronger market before making significant investments.

Like Monsanto (MON), FMC Corporation (FMC) is in the business of crop protection products. The majority of FMC’s sales come from its Agricultural Solutions segment.

The Sharpe ratio is calculated using standard deviation as its volatility measure.

CF Industries (CF) is expected to see a significant reduction in its capital expenditure (or capex) year-over-year (or YoY) in 2Q17 and for the next four quarters.

While the Fertilizer Affordability Index was below one, it’s still higher compared to the average levels observed since January 2016.

On September 12, 2016, PotashCorp and Agrium announced their intention to combine in a merger of equals. But China and India have set conditions.

The average price of ammonia for the week ending March 11 stood at $310 per metric ton, remaining unchanged from the previous week.

According to the Fertilizer Affordability Index, 2017 has been one of the most affordable years for fertilizers. Mosaic issues the index.

Over the past ten-year period, CF Industries has risen 186.0% and significantly outperformed the S&P 500 Index’s rise of 69.2% over the same period.

For the week ending November 25, fertilizer affordability fell to 0.65x from 0.66x week-over-week.

When we look at the past five quarters, we see that PotashCorp has missed all its earnings estimates.

CF Industries’ (CF) sales segment includes UAN (urea ammonia nitrate), AN (ammonia nitrate), ammonia, and granular urea.

Last week, fertilizer affordability rose to 0.66x from 0.65x week-over-week. A ratio below one means that fertilizers are more affordable than during the base year.

The Fertilizer Affordability Index has shown a downward trend since the beginning of the year. Fertilizers have become more affordable in 2017.

On March 13, 2017, five of the 18 analysts covering CF Industries (CF) recommended a “strong buy” to a “buy” for the next 12 months, down from six analysts in February.

China is the largest consumer of nitrogen fertilizers, but it produces most of it within its borders. Urea is Chinese farmers’ top choice.

CVR Partners missed both top-line and bottom-line estimates for the second quarter, and the stock fell 4.5% after the earnings release.

Recently, the Fertilizer Affordability Index has seen an upward trend.

Fertilizer affordability has seen some tightening in the last couple of months.

Without an understanding of factors that affect crop prices, it would be difficult to formulate a view on future crop prices and demand for nitrogenous fertilizers.

There’s a handful of big players in the agricultural fertilizer industry. Setting up business requires huge capital, which makes for a high barrier to entry.

At the end of 2017, after receiving final regulatory approval for the merger, PotashCorp and Agrium combined into a new company called Nutrien (NTR).

Sociedad Química y Minera de Chile (SQM) has yet to announce its earnings, unlike most of the companies we’ve discussed so far in this series.

Potash prices over the past few years have been considerably lower than what we saw during their peaks of ~$482 in 2011 and ~$870 in 2009.

On August 13, the crop index stood at 89.9. It rose by 1% following the USDA’s latest stock-to-use ratio, which was published on August 12.

Mosaic (MOS), which has historically traded at a high valuation multiple of 9.2x, is currently trading at an enterprise value to next 12-month EBITDA ratio of 5.7x.

Potash prices in the Corn Belt region of the United States appear to still be reversing their downward movement.

Intrepid Potash (IPI) is nearing $1 per share, which means that only a few analysts are covering the stock.

The Fertilizer Affordability Index kept trending lower last week, continuing its two-week streak.

The average price of ammonia for the week ending March 4, 2016, stood at $310 per metric ton compared to $311 per metric ton a week ago.

On average, granular urea prices were flat to positive week-over-week. In NOLA (New Orleans), granular urea prices rose as much as 3.5% week-over-week.

Last week, the Fertilizer Affordability Index remained unchanged at 0.65x week-over-week. Fertilizers are more affordable than during the base year.

Why oil affects fertilizer price In a competitive industry like nitrogenous fertilizer, the marginal producer’s cost sets the floor for the industry. These producers are the most expensive manufacturers to supply the product at that point in time. When the marginal producer’s cost rises, so does the industry’s. On the the other hand, falling costs […]

The importance of costs Understanding how fertilizers are produced is an important part of investing. What companies buy and what they pay for will be their costs. When costs are rising, they can have a negative impact on earnings and cash flow if the industry can’t pass them on to buyers. Conversely, when costs are falling, […]

In a competitive industry like the nitrogenous fertilizer industry, the marginal producer’s cost sets the industry floor.

According to the EIA (U.S Energy Information Administration), natural gas prices were broadly mixed from November 29 to December 6, 2017.

This series covers key trends that are currently affecting coal and natural gas prices and, consequently, nitrogen fertilizer producers as well.

The United States is one of the largest producers of agricultural products in the world, but it’s not a key producer of nitrogen fertilizers.

Nitrogen is an important nutrient for crop development and growth. It’s also the most important input that allows farmers to feed billions of people in the world.

Like DAP (diammonium phosphate) prices last week, MAP (monoammonium phosphate) prices were broadly flat to positive WoW (week-over-week) but stayed higher YoY (year-over-year).