CVR Partners LP

The world has a problem that’s actually good for the fertilizer industry. This is the world’s population, which is ever-growing, as is food consumption.

Several midstream stocks hit their respective 52-week lows in the last five days. Crude oil prices took a hit yesterday amid concerns over trade talks.

For the week ending November 2, the natural gas prices at Henry Hub declined to $3.29 per MMBtu from $3.36 per MMBtu.

In the week ending November 2, urea prices continued to drop—a continuation of the trend we observed in the past few weeks.

Natural gas prices for the week ending October 26 increased week-over-week at most locations in the US.

CVR Refining (CVRR) reported its third-quarter results on October 24 after the markets closed. The stock rose 7.2% in after-hours trading yesterday.

In the week ending October 19, natural gas prices trended lower after experiencing a spike in the week ending October 12 at Henry Hub.

In the week ending October 19, urea prices in the NOLA region of the US and in Brazil paused after a meteoric rise since the beginning of April.

Last week, global tensions remained high, and natural gas prices spiked as the overall stock market traded in the deep red.

Nitrogen fertilizer companies CF Industries (CF), Nutrien (NTR), and CVR Partners (UAN) fell last week due to the broader market sell-off.

Natural gas prices are a key price driver for urea and other nitrogen fertilizers.

Urea prices continued to strengthen last week, which added to the optimism surrounding nitrogen companies (XLB).

On October 2, CF Industries (CF) received a target price upgrade from UBS. The stock gained ~1.8% and rose to $55.8 during the day.

In the week ending September 28, the EIA (U.S. Energy Information Administration) reported that the natural gas prices in the United States were mixed.

In the week ending September 28, the urea prices in NOLA (New Orleans) and Brazil made new highs again. The rising trend started in May.

The week ending September 21 was broadly positive for the fertilizer sector. MOO rose 2.3% from the week ending September 14.

Low natural gas prices in the US have been highly beneficial for North American fertilizer companies (XLB) including CF Industries (CF), CVR Partners (UAN), Nutrien (NTR), and Mosaic (MOS).

We track natural gas prices since they can have a significant impact on the prices of nitrogen fertilizers companies.

Urea, the most common nitrogen fertilizer, has been on an upward trend in recent weeks.

We’re looking at natural gas prices in this series, primarily because they make up two-thirds of the input costs for nitrogen-based fertilizers.

CF Industries reported second-quarter sales of $1.3 billion, which beat analysts’ estimate of $1.2 billion.

American Midstream Partners (AMID) was the lowest-performing MLP in the week ended July 27.

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

CVR Energy (CVI) and its subsidiary CVR Refining (CVRR) reported their second-quarter results on July 25 after the markets closed.

Between July 11 and July 18, natural gas spot prices at Henry Hub fell about 4.2% to $2.72 per MMBtu (million British thermal units).

Today, RBC upgraded CF Industries (CF) from its “underperform” rating to “sector perform.”

CVR Partners (UAN) rallied 9.7% in the week ended July 13, making it the top MLP gainer for the week.

Last week, which ended July 13, was broadly negative for the agribusiness sector. The broader market index was positive.

CVR Partners is expected to report a loss per share of $0.06 in the second quarter compared to a loss per share of $0.03 in the corresponding quarter a year ago.

Wall Street analysts estimate sales growth of $102 million in the second quarter, which would be a 4% year-over-year increase from $98 million in the second quarter of 2017.

China is one of the largest fertilizer consumers in the world. Investors are concerned that retaliatory measures might hurt fertilizer companies.

In this series, we’ll look at key NPK (nitrogen, phosphorous, and potassium) fertilizer prices last week.

Last week, urea prices continued to be positive for companies (XLB) such as CF Industries (CF), Nutrien (NTR) (POT), and CVR Partners (UAN).

The upward trend for fertilizer continued last week, with CVR Partners (UAN) rising 9.6% week-over-week to $3.30.

Last week, the major NPK (nitrogen, phosphorous, and potassium) fertilizer prices rose broadly week-over-week.

CF Industries (CF), one of the major nitrogen producers in North America, has had a bumpy ride since 2015.

Last week, urea prices continued their positive momentum from a week ago in the NOLA (New Orleans) region of the United States as well as in the Brazil region.

Natural gas prices are critical for nitrogen and ammonia-based phosphate fertilizer producers.

After a brief pause in the direction two weeks ago, urea prices found positive momentum last week.

Mosaic is expected to report EPS of $0.28 in 1Q18, which would be a significant rise from its EPS of $0.04 in 1Q17.

Noble Midstream Partners (NBLX) was the top MLP loss last week. Noble Midstream Partners fell 5.6%.

Last week, urea prices were broadly flat to negative at two locations.

Last week, most fertilizer stocks ended in positive territory. Intrepid Potash (IPI) was the biggest gainer, rising 4.3% to $4.20.

Natural gas prices, which are key to US nitrogen fertilizer producers (MOO), were broadly lower during the week of April 4 to April 11, 2018.

On average, urea prices in the Middle East fell as much as 4% week-over-week to $237 per metric ton from $247 per metric ton a week ago.

CVR Partners (UAN) got an upgrade from Cowen and Company last week. CVR raised UAN to “outperform,” which is equivalent to a “buy.”

Calumet Specialty Products Partners (CLMT), a downstream MLP involved in the production of specialty fuels, was the top MLP gainer last week.

In the recent quarters, fertilizer companies (MOO) have rationalized their output and costs to sustain the downward momentum in fertilizer prices that seemed to keep going down.

In 4Q17, the overall nitrogen shipments of the five companies discussed below moved lower year-over-year.

Urea prices for the standard grade in the NOLA (New Orleans) region of the US and in Egypt saw the steepest weekly change last week.

So far this year, some major agribusiness stocks, particularly in the fertilizer sector, have performed poorly.

Last week, urea price movements were broadly positive with prices in the Middle East experiencing strong gains week-over-week.

During 4Q17, CF Industries received a one-time tax benefit of $491.0 million, or $2.09 per share, from the lowered corporate taxes in the US.

Lately, natural gas prices have experienced high volatility primarily due to the swing in weather in North America.

CVR Partners, the MLP involved in nitrogen fertilizer production, was the top MLP loser in the week ending January 26. The partnership fell 7.1% last week.

Plains All American Pipeline (PAA) was the biggest MLP loser last week, which ended on January 19, 2018. The partnership ended the week 6.1% lower.

In the week ending January 19, natural gas prices at Henry Hub remained elevated with the prices peaking at $5.46 per MMBtu (million British thermal units) on January 16, 2018.

Nitrogen fertilizer prices remained volatile on the back of the volatility in the input prices of natural gas.

In the week ending January 19, the VanEck Vectors Agribusiness ETF (MOO) rose 1%, and the broader market S&P 500 (SPY) also ended in positive territory with a gain of 1.2%.

Natural gas is one of the critical input materials needed for nitrogen and some phosphate-based fertilizers.

Urea is sold in the granular and prilled variety. In the week ending January 12, granular urea prices were broadly flat to positive week-over-week.

Ferrellgas Partners (FGP) was the top MLP loser in the week ending January 12, 2017. The partnership ended the week 11.5% lower.

Nineteen Wall Street analysts are covering CF Industries. They have a consensus mean rating of 2.7 on the stock with an overall “hold” recommendation as of January 10, 2018.

Foresight Energy (FELP) was the top MLP loser last week. It fell 3.8% in a single trading session on Friday, January 5, 2018.

CVR Partners (UAN) was the top MLP gainer last week, which ended on January 5, 2018. It rose 23.2%.

Natural gas is one of the key input components for gas-based nitrogen fertilizer producers (MOO)(MXI) such as CF Industries (CF), Terra Nitrogen (TNH), CVR Partners (UAN), and Nutrien (NTR).

In the week ending January 5, the prices for granular as well as prilled urea were broadly higher week-over-week.

Intrepid Potash (IPI) shifted its focus to produce trio. Besides trio, the company continues to diversify its income sources.

Intrepid Potash was one of the top performers in 2017. Its stock rose ~127% YTD from $2.1 on January 3, 2017, to $4.72 at the closing on December 28.

In this part of our series, we’ll discuss the valuation multiples for CF Industries (CF) and compare with peers’ (XLB) such as PotashCorp (POT), Agrium (AGU), Mosaic (MOS), CVR Partners (UAN), and other agribusiness stocks.

In the earlier part of this series, we discussed how shipments impacted CF Industries’ (CF) sales. From our analysis, it’s clear that a rise in selling prices remains the most important growth catalyst for the company.

The remaining companies In this part, we’ll compare the five remaining agribusiness companies’ valuation, again using forward EV-to-EBITDA (enterprise value-to-earnings before interest, tax, depreciation, and amortization) multiples. Valuation multiples As shown in the above chart, the remaining companies’ valuation multiples have risen in the last two years. At 18.3x, FMC (FMC) was trading at a premium to the peer […]

Nitrogen in 2018 Nitrogen prices remained weak for most of 2017, falling as much as 27% YoY (year-over-year). Ammonia, a fundamental nitrogen input, is further upgraded to nitrogen fertilizers such as urea and urea ammonium nitrate. Ammonia supply As shown in the above chart, ammonia capacity saw a net addition of five million metric tons, or […]

Blueknight Energy Partners (BKEP) was the top MLP loser last week—it fell 6.8%. The partnership has lost 30.7% since the beginning of the year.

CVR Partners, an MLP involved in nitrogen fertilizer production, was the biggest MLP gainer last week (ended December 8), rising 17.4% during the week.

CVR Partners (UAN) emerged as the top gainer last week, rising 17.4% week-over-week to close at $3.70. CF Industries (CF) followed, rising 4.4% to close at $39.30.

The average weekly natural gas prices at Henry Hub for the week ending November 17 moved higher week-over-week.

During 3Q17, urea prices were stronger year-over-year. According to Agrium (AGU), urea prices were positively impacted due to growth in demand from the Indian market as well as lower exports coming out of China.

On average, nitrogen fertilizer prices failed to show a meaningful growth YoY (year-over-year) in 3Q17.

EV Energy Partners (EVEP), an upstream MLP, was the biggest MLP loser last week, which ended on November 10, 2017. EVEP fell 25.5%.

In the week ending November 3, the overall weekly urea prices were broadly flat to negative week-over-week.

In the week ending November 3, agricultural fertilizer stocks were broadly positive.

In the previous part of this series, we saw how CF Industries’ (CF) overall and segment sales performed in 3Q17. The company’s growth was mainly driven by shipments growth.

In 3Q17, CF Industries (CF) sales saw growth across each of its five segments year-over-year. Overall, the company’s sales grew 28% year-over-year to $870 million from $680 million in 3Q16.

CVR Partners (UAN), the MLP mainly involved in the production of nitrogen fertilizers, was the top MLP gainer last week. CVR Partners rose 7.7%.

Last week continued to be a positive week for urea prices. Prices have risen lately as a result of excess capacities cooling off.

Last week, the VanEck Vectors Agribusiness ETF (MOO) closed 40 basis points higher from the start of the week. The S&P 500 Index (SPY) ended the week 62 basis points higher.

Overall, PotashCorp’s (POT) nitrogen prices in 3Q17 indicated no positive momentum, which is a trend we’ve observed in recent years.

Nitrogen prices have been subdued for most of this year—compared to a few years ago. The global market continues to experience excess capacity.

After an impressive runup in the past four months, urea prices appear to be cooling off.

CONE Midstream Partners (CNNX) fell 8.7% during the week and has fallen 32.7% since the beginning of 2017.

Dominion Midstream Partners (DM) was the top MLP gainer in the week ending September 22, 2017. Dominion Midstream rose 12.1% during the week.

In the week ending September 22, urea prices gained significant upward momentum. The gain was favorable news for nitrogen fertilizer producers.

As of September 18, the consensus mean price target on CMP stood at $69.5 per share, which was about 1.6% lower than the closing price of $70 on the same day.

CF Industries CF Industries (CF) has had a decent run so far this year. YTD (year-to-date), the company has returned 11.5%, which is slightly shy of the S&P 500 Index’s (SPY) return of 11.8% over the same period. Over the last one month alone, the stock has risen by ~20.9%, which has left behind other […]

NGL Energy Partners (NGL) was the top MLP gainer last week. NGL rose 17.2% during the week due to the rally in crude oil prices.

Over the past ten-year period, Scotts Miracle-Gro has risen 193.0% and significantly outperformed the S&P 500 Index’s rise of 69.2% over the same period.

On September 7, 2017, PotashCorp (POT) and Agrium (AGU) provided an update on the status of their merger. The merger was initiated almost a year ago.

Calendar 2Q17 remained subdued for the nitrogen fertilizer pricing environment. Cheap energy costs have driven capacity buildups and flattened the cost curve.

While CF Industries’ (CF) shipments rose in 2Q17, price realizations continued to disappoint.