CF Industry Holdings, Inc.
by Michael VodickaNovember 03, 2011 | Comments : 0 Recommended this article: (0)
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CF Industry Holdings, Inc., through its subsidiary, CF Industries, Inc., manufactures and distributes nitrogen and phosphate fertilizer products to agricultural and industrial customers worldwide. The company was founded in 1946 and has a market cap of $12.1 billion.
CF took a beating in September, trading sharply lower with the market as investors worried about global growth. But shares have also been quick to rebound, supported by strong Q3 results from early November that came in ahead of expectations.
Revenue for the period was up 53% from last year to $1.4 billion. Earnings also came in strong at $5.16 per share, 7% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 10% over the last four quarters.
The key to the good quarter was a very positive pricing environment, where strong global demand continues to pressure supplies. For the quarter, total sales volumes were increased to 3.5 million tons from 3/4 million tons in the same period last year.
CF is using its strong earnings momentum to boost its financial profile, with cash and short-term investments more than doubling from last year to $1.4 billion while total debt fell 28% to $1.62 billion.
We've already seen some solid movement in estimates off the good quarter, with the current year up 66 cents to $21.77, a 153% growth projection from last year.
But in spite of the gains, the valuation picture still looks great, with shares trading at just 7X forward earnings, a sharp discount to the market and its peers.
On the chart, shares have been in pure rally mode for the last month after finding a short-term bottom in early October. Take a look below.
Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Whisper Trader Service.
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