The closer you are to NOLA, the closer you are to imports the less you get for your products. Yes you can rail it into the corn belt, but that costs money and you need terminals. RNF's main plant gets relatively more for its nitrogen products in the center of the corn belt than the southern plains.
I prefer RNF's diversified product slate to CVR which is all UAN now just like their stock symbol.
UAN has a market cap of $1.7 billion and did a big secondary issue. We've learned a 1 million ton plant will cost about that so it is trading at replacement. RNF has a $1.1 billion market cap and no secondary issue. RNF raised some debt money, maybe they'll buy some units back.
The main beef on RNF would be the turnaround which will cut into the Q4 distribution. That's 2 quarters away though.
I have no big beef against UAN except it will take some time to absorb the big secondary. However, it is trading substantially below that so could climb back.
Fear Of Chinese Urea Exports Dampens U.S. Nitrogen Equities [View article]
That is possible, but reports less N was laid down in Spring at lower prices due to rain means the qiuck strike advantage of CF with its terminal network which I always liked might have been dimihished - poor Q/Q comparables. Lots of time for imports to seep their way north for summer application- except some upper Mississippi locks closed yesterday.
Fear Of Chinese Urea Exports Dampens U.S. Nitrogen Equities [View article]
RNF's plant at Pasadena, TX doesn't make nitrogen, they buy it .
I would like to mention some of these farmer backed nitrogen plants which I have not given much credence to but look more and more like they have a business case, due to cheap natural gas in the Bakken and state incentives
There are two North Dakota nitrogen plants that are at the planning stage. One in Grand Forks and the other Jamestown. I knew about the ND Corn Growers one which was announced a year ago, and didn't give it much chance of succeeding. The plant was originally $1.1 billion when announced last summer but was upsized to 750,000 tons p.a. and currently has a price tag of $1.5 billion and probably this will go higher given what Agrium and Yara were saying that costs are escalating.
There is also a CHS plant being proposed which I had seen headlines on and thought was the same plant. CHS, a coop, is a formidable enterprise and big fertilizer importer. CF Industries grew out of CHS and other coops and still has links This plant's last estimated cost was $1.4 billion. Suze would be similar. This one has the ND Farmers Union involved. There is also a movement by Canadian prairie farmers to build or invest in a plant.
So I would be concerned if any of these plants are not eventually cancelled. They look like they have an attractive feedstock in the flare gas from the Bakken. Tthe capital contributions required by farmers in a falling urea price environment make them speculative. They are more expensive than the Agrium and Yara plants on a per capacity ton basis becuase they are smaller. They do not benefit from synergies with a plant network, being more like Rentech and CVR being stand alone. But crazy things happen when free market forces are interfered with.
Since the two ND proposed plant sites are close, I would think only one would go ahead at best but keep an eye on these two.
CF Industries: Undervalued Based Upon Replacement Assets And Normalized Returns [View article]
Well I think that quote from my April 17 article says I suspected not all the new North American N plants announced would be built - witness Yara's announcement today suspending Belle Plaine and Agrium's recently so maybe correct on that?
And I did say that most of the bad news was discounted already on N stocks I even said CF was a good sign of that at $177 that N was being heavily discounted. OK, seems correct as the stock rallied and that was what I thought in mid April.
And AGU closed at $88.80 today and down less than 3% so not a bad defensive position in a poor market for N stocks.
So exactly what was your point? No not just the technicals have changed. And I plan to write an article on the situation soon but not on Seeking Alpha - my newsletter - but it will be the last one - I am taking the summer off.
Note CF produces phosphate (DAP and MAP) as well as N and also operates outside of North America so not just a pure N play in N. America.
CF Industries: Undervalued Based Upon Replacement Assets And Normalized Returns [View article]
The author liked CF back on Feb 19 which my chart says was at $218 on that day. It has been below water since, now it is at $184 and he still wants to write about it. I suppose we'll get another article at $165, which is where it is headed.
Should You Be Concerned About The Dividend Offer From Enerplus? [View article]
This article is another blow to the D-I-Y equity research movement. Caveat emptor.
How can one possibly discuss the dividend safety without a financial and liquidity analysis? The author says he is going to do this.
"The analysis of its earnings report and a forward-looking discussion of the company should give hints about the stability of its dividend payment in the near term."
Where is it? Cutting and pasting a few lines from the earnings report just doesn't cut it.
He says ERF offers "an attractive monthly dividend of 7%" and a "hefty dividend 7% return".
Author - take a basic financial or securities course. You don't even speak the language properly.
The ERF monthly dividend is currently 9 cents and it would offer a prospective annual yield (if it isn't cut) of 7% on the current stock price of of $15.58 CAD.
A return incorporates both dividend and capital appreciation - or in this case loss.
Does the author actually know the difference between cash flow and cash on the balance sheet?
"The last point that I want to mention is that the company's net cash at the end of the period increased to $12.5 million from $1.4 million a year ago. The net cash flow is improving, and it should provide stability to the dividend. Furthermore, hikes in dividend may be expected in the future."
It's awe-inspiring that he actually mentions Atlantic Power - a major league, dividend-cutting stock meltdown, as supporting his case that "natural gas prices" are going to go up and benefit Enerplus. Does he actually know that natural gas prices are location dependent - specifically - Alberta (AECO) - natural gas prices are depressed and the discount relative to NYMEX has widened. Just as it was about 14 years ago (by the way, when I was buying Enerplus as a unit in the $2-3 range).
The stock may go up - but it will have nothing to do with anything mentioned in this article.
Agrium: Essential To Food Production And A Good Addition To Your Portfolio [View article]
This article has multiple errors and doesn't cover the wholesale markets or Agrium's retail business properly.
Cash flow was $2.119 billion in 2012, not $837 million. Cash flow in the first quarter ending March 31, 2013 was $355 million. No idea where that $837 million number the author cites is from as it is not referenced.
Cash and equivalents was not $1.8 billion, but $585 million as of March 31, 2013 and $726 million as of December 31, 2012.
The author says retail agricultural centers number around 500 and I am not sure what the author is including but the numbers for total retail locations including farm centers, satellites and terminals are actually 824 for the USA, 94 for Canada, and 279 for Australia. No mention is made of the 219 Viterra locations that are being bought subject to regulatory approval.
I think the article is possibly the worst I have read on the fertilizer industry on Seeking Alpha. It says agriculture is stable and constant but it is anything but that.
I am bullish on Agrium but this article really doesn't cover it.
Potash Economics And An Undervalued American Junior Potash Play [View article]
Well, I think I wrote "PGRX strikes me as somewhat of a promotion". Maybe not. I think when all the facts say the world doesn't need what you are promoting to sell, and the world is not stepping up to give you a billion to mine what the world doesn't need for the foreseeable future, well, I say that is not right to suggest otherwise. I think a viable concern qualification by the auditor is required.
It should be made clear to investors (I could use another word here) that in many of these companies, tinsiders and the management they hire, are working very very hard to maximize their wealth, and to think that necessarily extends to the benefit of the public shareholder is a fantasy.
And I have to smirk when you tell me a managing director (didn't you know that is what they call an investment bank or brokerage salesperson when they have high production or they need to look more important to clients) of Barclays is some kind of pristine individual. Isn't that the same bank that is accused of LIBOR-rigging and other such things?
I'd love to say I only talk about this potash name, but here is another one that I warned people about several months ago.
An SA article (now disappeared from the website it appears) said Ethiopian Potash was a screaming buy and I responded on that one as well. No matter that the Djibouti K deposit sits in an area with earthquake and volcanic activity (a hell of a place to sink a shaft) and is rife with guerrilla intrustions from adjacent Eritrea. Now FED.V has been halted since April 22.
I also tried to stop a blog from writing great things about Ethiopian Potash on that phony informational website which is sponsored by penny potash and fertilizer startups.
Let's just say I like to use my apparently not so great ability to read SEC and SEDAR filings, to save a few souls from losing all their money.
Look, maybe I don't mince my words. But shouldn't there be some opposing voices, hopefully seasoned and well-informed, that counter the beautiful pictures of harvested crops and smiling third world faces on the websites and brochures of these companies? I for one think yes.
You are correct. I think I have spent too much time has being spent here.
Potash Economics And An Undervalued American Junior Potash Play [View article]
Thanks for the finance lesson. I taught 3rd year degree level finance for several years. America West used to be an airline. Now its a potash play. Airlines are where its been at - Delta up 80% since September.
Eurochem announces they are going ahead with a massive (low cost) potash mine. Mosaic CEO indicates someone like Intrepid (I mentioned it above) as a potential acquisition target. There Trio product fits with Mosaic's K-Mag. Stock up 42 cents to 17.73. Do I own it? I did but maybe again - MOS has to clear out the Cargill trust shares on May 26 first.
PGRX at 22.59 cents on 79,900 shares. i.e. $18,000 worth.
Fear Of Chinese Urea Exports Dampens U.S. Nitrogen Equities [View article]
The closer you are to NOLA, the closer you are to imports the less you get for your products. Yes you can rail it into the corn belt, but that costs money and you need terminals. RNF's main plant gets relatively more for its nitrogen products in the center of the corn belt than the southern plains.
I prefer RNF's diversified product slate to CVR which is all UAN now just like their stock symbol.
UAN has a market cap of $1.7 billion and did a big secondary issue. We've learned a 1 million ton plant will cost about that so it is trading at replacement. RNF has a $1.1 billion market cap and no secondary issue. RNF raised some debt money, maybe they'll buy some units back.
The main beef on RNF would be the turnaround which will cut into the Q4 distribution. That's 2 quarters away though.
I have no big beef against UAN except it will take some time to absorb the big secondary. However, it is trading substantially below that so could climb back.
Fear Of Chinese Urea Exports Dampens U.S. Nitrogen Equities [View article]
Fear Of Chinese Urea Exports Dampens U.S. Nitrogen Equities [View article]
Fear Of Chinese Urea Exports Dampens U.S. Nitrogen Equities [View article]
I would like to mention some of these farmer backed nitrogen plants which I have not given much credence to but look more and more like they have a business case, due to cheap natural gas in the Bakken and state incentives
There are two North Dakota nitrogen plants that are at the planning stage. One in Grand Forks and the other Jamestown. I knew about the ND Corn Growers one which was announced a year ago, and didn't give it much chance of succeeding. The plant was originally $1.1 billion when announced last summer but was upsized to 750,000 tons p.a. and currently has a price tag of $1.5 billion and probably this will go higher given what Agrium and Yara were saying that costs are escalating.
There is also a CHS plant being proposed which I had seen headlines on and thought was the same plant. CHS, a coop, is a formidable enterprise and big fertilizer importer. CF Industries grew out of CHS and other coops and still has links This plant's last estimated cost was $1.4 billion. Suze would be similar. This one has the ND Farmers Union involved. There is also a movement by Canadian prairie farmers to build or invest in a plant.
So I would be concerned if any of these plants are not eventually cancelled. They look like they have an attractive feedstock in the flare gas from the Bakken. Tthe capital contributions required by farmers in a falling urea price environment make them speculative. They are more expensive than the Agrium and Yara plants on a per capacity ton basis becuase they are smaller. They do not benefit from synergies with a plant network, being more like Rentech and CVR being stand alone. But crazy things happen when free market forces are interfered with.
Since the two ND proposed plant sites are close, I would think only one would go ahead at best but keep an eye on these two.
Thank you for your comments.
CF Industries: Undervalued Based Upon Replacement Assets And Normalized Returns [View article]
http://bloom.bg/11rPtvW
CF Industries: Undervalued Based Upon Replacement Assets And Normalized Returns [View article]
And I did say that most of the bad news was discounted already on N stocks I even said CF was a good sign of that at $177 that N was being heavily discounted. OK, seems correct as the stock rallied and that was what I thought in mid April.
And AGU closed at $88.80 today and down less than 3% so not a bad defensive position in a poor market for N stocks.
So exactly what was your point? No not just the technicals have changed. And I plan to write an article on the situation soon but not on Seeking Alpha - my newsletter - but it will be the last one - I am taking the summer off.
Note CF produces phosphate (DAP and MAP) as well as N and also operates outside of North America so not just a pure N play in N. America.
CF Industries: Undervalued Based Upon Replacement Assets And Normalized Returns [View article]
CF Industries: Undervalued Market Leader [View article]
So CF has been a losing hand since this article was written.
Should You Be Concerned About The Dividend Offer From Enerplus? [View article]
How can one possibly discuss the dividend safety without a financial and liquidity analysis? The author says he is going to do this.
"The analysis of its earnings report and a forward-looking discussion of the company should give hints about the stability of its dividend payment in the near term."
Where is it? Cutting and pasting a few lines from the earnings report just doesn't cut it.
He says ERF offers "an attractive monthly dividend of 7%" and a "hefty dividend 7% return".
Author - take a basic financial or securities course. You don't even speak the language properly.
The ERF monthly dividend is currently 9 cents and it would offer a prospective annual yield (if it isn't cut) of 7% on the current stock price of of $15.58 CAD.
A return incorporates both dividend and capital appreciation - or in this case loss.
Does the author actually know the difference between cash flow and cash on the balance sheet?
"The last point that I want to mention is that the company's net cash at the end of the period increased to $12.5 million from $1.4 million a year ago. The net cash flow is improving, and it should provide stability to the dividend. Furthermore, hikes in dividend may be expected in the future."
It's awe-inspiring that he actually mentions Atlantic Power - a major league, dividend-cutting stock meltdown, as supporting his case that "natural gas prices" are going to go up and benefit Enerplus. Does he actually know that natural gas prices are location dependent - specifically - Alberta (AECO) - natural gas prices are depressed and the discount relative to NYMEX has widened. Just as it was about 14 years ago (by the way, when I was buying Enerplus as a unit in the $2-3 range).
The stock may go up - but it will have nothing to do with anything mentioned in this article.
Agrium: Essential To Food Production And A Good Addition To Your Portfolio [View article]
http://seekingalpha.co...
http://bit.ly/18gkqIi
http://bit.ly/192py42
http://bit.ly/18gkoAe
http://bit.ly/1a2QwGt
http://bit.ly/192py47
Agrium: Essential To Food Production And A Good Addition To Your Portfolio [View article]
Cash flow was $2.119 billion in 2012, not $837 million. Cash flow in the first quarter ending March 31, 2013 was $355 million.
No idea where that $837 million number the author cites is from as it is not referenced.
Cash and equivalents was not $1.8 billion, but $585 million as of March 31, 2013 and $726 million as of December 31, 2012.
The author says retail agricultural centers number around 500 and I am not sure what the author is including but the numbers for total retail locations including farm centers, satellites and terminals are actually 824 for the USA, 94 for Canada, and 279 for Australia. No mention is made of the 219 Viterra locations that are being bought subject to regulatory approval.
I think the article is possibly the worst I have read on the fertilizer industry on Seeking Alpha. It says agriculture is stable and constant but it is anything but that.
I am bullish on Agrium but this article really doesn't cover it.
Potash Economics And An Undervalued American Junior Potash Play [View article]
Another one this week....
http://bit.ly/13yOYk1
Potash Economics And An Undervalued American Junior Potash Play [View article]
I think when all the facts say the world doesn't need what you are promoting to sell, and the world is not stepping up to give you a billion to mine what the world doesn't need for the foreseeable future, well, I say that is not right to suggest otherwise. I think a viable concern qualification by the auditor is required.
It should be made clear to investors (I could use another word here) that in many of these companies, tinsiders and the management they hire, are working very very hard to maximize their wealth, and to think that necessarily extends to the benefit of the public shareholder is a fantasy.
And I have to smirk when you tell me a managing director (didn't you know that is what they call an investment bank or brokerage salesperson when they have high production or they need to look more important to clients) of Barclays is some kind of pristine individual. Isn't that the same bank that is accused of LIBOR-rigging and other such things?
I'd love to say I only talk about this potash name, but here is another one that I warned people about several months ago.
http://yhoo.it/18O85vZ
An SA article (now disappeared from the website it appears) said Ethiopian Potash was a screaming buy and I responded on that one as well. No matter that the Djibouti K deposit sits in an area with earthquake and volcanic activity (a hell of a place to sink a shaft) and is rife with guerrilla intrustions from adjacent Eritrea. Now FED.V has been halted since April 22.
I also tried to stop a blog from writing great things about Ethiopian Potash on that phony informational website which is sponsored by penny potash and fertilizer startups.
http://bit.ly/10BkonV
Let's just say I like to use my apparently not so great ability to read SEC and SEDAR filings, to save a few souls from losing all their money.
Look, maybe I don't mince my words. But shouldn't there be some opposing voices, hopefully seasoned and well-informed, that counter the beautiful pictures of harvested crops and smiling third world faces on the websites and brochures of these companies? I for one think yes.
You are correct. I think I have spent too much time has being spent here.
Potash Economics And An Undervalued American Junior Potash Play [View article]
Potash Economics And An Undervalued American Junior Potash Play [View article]
Eurochem announces they are going ahead with a massive (low cost) potash mine. Mosaic CEO indicates someone like Intrepid (I mentioned it above) as a potential acquisition target. There Trio product fits with Mosaic's K-Mag. Stock up 42 cents to 17.73. Do I own it? I did but maybe again - MOS has to clear out the Cargill trust shares on May 26 first.
PGRX at 22.59 cents on 79,900 shares. i.e. $18,000 worth.