CF & TNH vs the others

Discussion in 'Stocks' started by NoDoji, May 6, 2010.

  1. NoDoji


    CF P/E is 10

    TNH is 14 (and their div is 6.3%)

    The others:

    AGU P/E is 26

    MOS is 37

    POT is 27

    Does anyone know if these high P/E's are justified compared to CF & TNH? MOS future earnings projections are the worst of the bunch and yet they're trading at a premium.
  2. GG1972


    POT and AGU are canadian MOS is US-CAN$ is (or was until 2 days ago) at par with US $ so earnings might be affected. The canadian dollar will eventually fall and trade around .85-89 vs US and that will affect the earnings. I try not to get into the fundamental stuff--its more mental than funda for me-wish I knew how to effectively trade futures -my SPY puts woulde retired me today. :D :D :D
  3. NoDoji


    I researched CF and TNH further and nixed TNH, but thought CF would be a good one to open a small position on in the IRAs for a long term hold. Before the open I looked at the 52-week low, saw that price wasn't all that far from it and wondered if it would retest that low. I remembered how years ago my husband would place absurdly low limit orders for stocks he wanted in our IRAs and every now and then get a fill, and I was about put in a GTC limit order @ 70.00 figuring what the heck, then I saw that their earnings date was tomorrow and decided not to.

    Today's range: 68.99-78.95

  4. GG1972


    I think i ve posted somewhere earlier too but why not go for decent dividend paying stocks like GSK, lly, vz,eca etc all these stocks have the potential for big runs at one time or another 30-40% while you wait with the dividends-i know dividends going to be taxed higher moving on but in IRA's it shouldnt matter.
  5. NoDoji


    That is my main focus actually. I bought IRR Thursday and it not only survived the crash beautifully (and came within .10 cents of my limit order for the second half of a position), it pays a 9% dividend, and my position is green :D
  6. GGSAE


    Keep in mind that the first few you mentioned deal with nitrogen (which is directly affected by the prices of natural gas) primarily while the others have a mix, potash being the core in POT obviously.
    Remember not that long ago these guys came out and were crushing expectations on earnings, POT has always traded at the biggest premium in the group because it has the biggest world share of potash which is still selling relatively low - last I checked it was around $380 a short ton. So if (and that's a big iff) long and short ton potash pricing increases you will see revenues crush earnings again.

    I don't know about CF right now as an investment, remember they paid up to 10 times book value for TRA, what did they have - 8 rejected bids? Not too mention TRA also paid a 7.50$ special divended as an added bonus to their sharedholders (talk about maximizing value) so it's not like CF got that money when they bought TRA out.

    I'd consider looking at either MOS or IPI, both have good p/bs with low amounts of debt and high amounts of cash - great potential takeover targets. I remember reading somewhere that the biggest supplier of nitrogen was still only 10% of the world - I believe YARA - so expect a lot more consolidation in this industry...also IPI has a brutally high short interest rate, i remember the first quartely earnigns when POT had good numbers IPI finished up 13% that day, low liquidity, very high short interest...mind you that mess with those lawsuits are still dangling in the wind, however long that gets settled...
  7. Candace


    NoDoji your timing is impeccable, as ever. (I was an earlier mouse). According to the May 7th edition of the Weekly Fertilizer review, the price in Illinois last week increased to $495 and farmers have been advised to get in there and buy up what they can as distributors (burned by high priced slow moving inventory in 2009) currently have low levels of inventory. More potential catalysts coming, including India and China quarterly contracts expiring in June and the possibility of an ethanol % increase to be announced in June.

    I only know POT, so I can't offer an opinion on which stock will outperform. The only disadvantage with POT that I am aware of is that they spent a bunch buying other fertilizer firms (to diversify into nitrogen and phosphates) and would struggle if another credit crunch arrived.

    Scotiabank has an Outperform rating on them and says: Potash has 22% of the world's potash capacity and 75% of the world's excess capacity. 1 year target: $150.00 Valuation: 16x p/e on 2011E EPS, $1.00 C$, + $5 per share takeover premium
  8. NoDoji


    Thanks everyone for the input. At this point, I'm staying on the sidelines because of the uncertainty overseas. The whole market has the same feel it had in spring of 2008 when I first became a market participant. There was a strong bull run off panic lows (1/22/08) and then there was the scary dip of uncertainty when BSC went down, then the bulls bought the dip as usual, but in May things got toppy, left a lower high shortly thereafter and it all went downhill after that.

    Europe is one scary situation at this point. I learned in 2008 that prices can go much lower than you can possibly imagine. I learned Thursday they can do that in 10 minutes.