CF - CF Industries Holdings, Inc

[ItsAValueTrap]

1- Over that past decade, the replacement cost of CF's assets has gone up significantly.  I think the return on assets is somewhere in the teens (10-20%).  I believe this is why the industry players haven't been expanding like crazy.

 

2- Potash and Agrium haven't been going crazy in building nitrogen plants.

 

3- The US is under capacity by a lot.

 

but very specifically on NG being low in the US relative to the rest of the world.

True.  The nitrogen producers have a freight cost/geography advantage that protects them a little bit from foreign competition.

[JBird]

As I mentioned in my last post, I understand part of their capex is for expansion. Maybe its my ignorance, but I don't see how that quote quantifies the company's overall maintence capex vs expansion capex. Thanks for posting though

[ItsAValueTrap]

Take their capex for the year and subtract $120.8M.  That should be their maintenance capex for the year.

[boilermaker75]

CF spikes up $20 per share on Third Point stake,

 

http://www.streetinsider.com/Hedge+Funds/UPDATE%3A+CF+Industries+(NYSE%3A+CF)+Spikes%3B+Third+Point+Reports+Stake/8541009.html

[GnDville]

 

What do you make of the logic in the following link?: Daniel Loeb Comments On CF Industries (http://www.gurufocus.com/news/224946/daniel-loeb-comments-on-cf-industries)

 

Summary of the link:

 

[1] CF Industries is one of the lowest-cost producers globally (access to North American natural gas)

 

[2] Structural cash flow generation strength is misunderstood (even at $5 Henry Hub natural gas input cost and $275 per ton nitrogen fertilizer price, estimated annual cash flow is ~$1.2 billion)

 

[3] Currently trades at an unwarranted discount to fertilizer & commodity chemical peers (trades at ~11% free cash flow yield under above “onerous” assumptions; valuation multiple implying a 7-8% yield is warranted given “bond like” predictability of minimum cash flows)

 

 

[boilermaker75]

http://finance.yahoo.com/news/mosaic-pays-1-4b-cf-industries-phosphate-unit-124743787--finance.html

[nielfiel]

Attached is my position summary regarding CF Industries.  Please feel free to read it and provide any feedback and/or ask questions.

Position_Sumamry_-_cf_us.pdf

[aalexa1225]

Anyone have any thoughts on this?

 

Market is 7.52B, compared to equity of 4B. On that basis, we are going to have to value the business based on earnings.

 

In 2015, it earned $700m, which was the lowest since 2011. They have a pretty solid competitive position in the United states; they are the biggest producer, and even with that the total US production can not equal total US consumption, so the US relies on imports for around 30% of the nitrogen consumed in the US.

 

Also, they are merging with OCI, whic is going to add 10 percentage points to their margin, which is going to add $100m to their earnings. One thing I dont know is whether the merger is going to go through. So if anyone has thoughts on that; helpful.

 

https://www.snl.com/Cache/1001207780.PDF?Y=&O=PDF&D=&FID=1001207780&T=&IID=4533245

 

Here is the investment presentation. Sorry for the poor writeup, I am just wondering who else has thoughts on this. I have not bought any yet.

AOA