Terra Nitrogen Company (TNH) is an attractive company to own. It has huge competitive advantages due to its relationship with CF Industries (CF), its strategic positioning near the US Midwest, and macroeconomic factors.
Terra Nitrogen Company is a master limited partnership (MLP).
An MLP has a general partner and limited partner(s). The general partner manages the company's operations and assumes unlimited liability. The limited partner(s) provides initial capital and only assumes limited liability. Because of the risk the general partner assumes and its managing duties, the GP receives additional share of profits. In an MLP, the limited portion of ownership is publicly traded. Additionally, MLPs have tax advantages similar to a REIT. The company's...
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