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Post by gopalbhat on Nov 12, 2011 12:06:23 GMT -5
Any inputs on CF? A navellier pick. Growing fast since 136. A low PE of 9, good sales and earnings, dividend to boot and fertilizers is something of interest to all.
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Post by roy on Nov 12, 2011 14:46:50 GMT -5
CF is defensive - dont expect a lot of profit growth in the next two-three years.
Don't expect a huge upside in the stock but may not go down much either.
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Post by T Bhat on Nov 12, 2011 18:27:01 GMT -5
I checked this out in value line investment survey. The projections ( not always accurate ) are as follows:
The earnings per share is projected to be $23 between 2014-2016. The share price projection is expected to be between $165 - $250 in that time frame. So there is not a whole lot of upside from here.
The second thing that threw the red flag for me was the debt/equity ratio. This is around .38 which is rather high.
The third factor is that the natural growth in the business has been static and has been aided by an acquisition.
The last factor is that the customers are all in the midwest or europe. Natural gas is a main ingredient for creating the fertilizers and cheap natural gas is very helpful for the process. People are predicting natural gas prices to go up in the next two years from $4 levels to $6 level. This could impact margins and profit.
However, it is a very stable business which is needed as long as people keep eating ;D. Given the increase in global population, dont see this business going away anytime soon.
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