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Dahlman Rose grows more cautious on the fertilizer sector, seeing substantial pressure on...

Dahlman Rose grows more cautious on the fertilizer sector, seeing substantial pressure on nutrients pricing in H1 with nitrogen having the greatest long-term margin risk given capacity additions. The firm cuts Agrium (AGU), CF Industries (CF) and Rentech Nitrogen (RNF) to Sell from Buy, Potash (POT) to Sell from Hold, and Mosaic (MOS) to Hold from Buy.
Comments (18)
  • vallies
    , contributor
    Comments (351) | Send Message
     
    Finally getting a solid pullback in this one. Top side recent target was 66. It sat around 61. to 63. Everyone was waiting for an upgrade and they didn't get it. It needs to hold 55. otherwise it may have more down side. CF reported solid numbers. They have turned somewhat bearish on this sector. Recent contracts puts China in the 400 tonne and India just above that. U.S. Cuts might affect this sector. Instead of cutting farmers maybe they should cut loose some of those lawyers who are getting money for people who don't even produce food for the country. YES, that's right. Certain ethnicities of whom didn't get the 40 acres or a mule are suing the government because of this. And even more money is being set aside for women, Asians, the list goes on. If you own a certain amount of acres and you have receipts, you can say that you feel your rights to become a food producing, farmer, individual were denied and get money. How nice for those who actually do the work. Have you ever worked on a farm, it is ball busting, early in the morning till late at night work. The lawyers found another one to steal their fees from us, the tax payer. I own MOS and I am glad for the hold, I hope it gets hit so I can buy more. MOS share holders meeting Feb, 26.
    22 Feb 2013, 10:37 AM Reply Like
  • Michael Bryant
    , contributor
    Comments (5615) | Send Message
     
    Sound like if Congress is really serious of unnecessary spending cuts, this case should be thrown out. And anybody else who files an insane lawsuit should get jail time, lawyers included.
    22 Feb 2013, 12:33 PM Reply Like
  • Brad Kenagy
    , contributor
    Comments (1587) | Send Message
     
    I bought RNF @ $46 a couple week ago, and today is down to $37.60. As soon as there is an end to storms in the Midwest and plains, I will start loading up on shares at a lower price than my original purchase price, in preparation for spring and summer fertilizing season.
    22 Feb 2013, 11:35 AM Reply Like
  • Michael Bryant
    , contributor
    Comments (5615) | Send Message
     
    If they keep paying a dividend at or above $0.75 a quarter, your principle would be paid off in $15.33 years even if the stock goes to $0. Not bad.
    22 Feb 2013, 12:38 PM Reply Like
  • Brad Kenagy
    , contributor
    Comments (1587) | Send Message
     
    Funny is the stock is down today because of analyst downgrade to sell from buy, and the same analyst upgraded the stock at the end of January 2013 to buy. Crazy analysts!!
    22 Feb 2013, 12:49 PM Reply Like
  • Michael Bryant
    , contributor
    Comments (5615) | Send Message
     
    Nope, that is their job. They do whatever can make them money.
    22 Feb 2013, 12:58 PM Reply Like
  • billmartin
    , contributor
    Comments (8) | Send Message
     
    @ Michael Bryant. Careful. It's not structured like most energy MLP's.

     

    (ie; 1.maintaining a minimum distribution. 2. paying out steady dividend increases over time.)

     

    I don't have an opinion on the direction of the price, or whether its a buy or a sell at it's current price.

     

    Oh, and @ Brad K. ; this is not a stock, so just a friendly reminder to file the tax forms correctly.
    24 Feb 2013, 03:08 AM Reply Like
  • Brad Kenagy
    , contributor
    Comments (1587) | Send Message
     
    Thank you for the advice, I hold RNF in my Roth IRA.
    24 Feb 2013, 11:24 AM Reply Like
  • Mike Serebrennik
    , contributor
    Comments (773) | Send Message
     
    Watch out for "unrelated business expense" tax hit. Yes, it can happen in a Roth. http://seekingalpha.co...
    4 Mar 2013, 06:41 PM Reply Like
  • pcship
    , contributor
    Comments (39) | Send Message
     
    RNF is a solid company with much needed product.I took profits & bought back at $42.00. intend to double my position.
    22 Feb 2013, 05:49 PM Reply Like
  • Brad Kenagy
    , contributor
    Comments (1587) | Send Message
     
    I own shares of RNF @ $46/share and I will possibly add to my position if RNF falls down to around $34.50 support level, and can hold that level. If it cant hold that level, the next level of support is around $30.
    22 Feb 2013, 07:17 PM Reply Like
  • depsee
    , contributor
    Comments (73) | Send Message
     
    Food , and those things needed to produce it, is a long term no way around it necessity regardless of some analyst short term opinion. In my opinion.
    22 Feb 2013, 10:03 PM Reply Like
  • Brad Kenagy
    , contributor
    Comments (1587) | Send Message
     
    I agree, the short term noise doesnt bother me at all, just gives me a better price to load up on more shares.
    22 Feb 2013, 10:37 PM Reply Like
  • depsee
    , contributor
    Comments (73) | Send Message
     
    Amen brother, my thoughts also.
    23 Feb 2013, 12:45 AM Reply Like
  • Michael Bryant
    , contributor
    Comments (5615) | Send Message
     
    Until we find how to 3D print food.
    25 Feb 2013, 01:01 PM Reply Like
  • joemarko
    , contributor
    Comments (25) | Send Message
     
    i like fertilizer this time of year. been kind of a wet season, im figuring corn will do well, meaning nitrogen fertilizer will too . Worth holding til June or July to collect dividends and see how share price improves
    23 Feb 2013, 07:15 AM Reply Like
  • Not_Quite_Pheidippides
    , contributor
    Comments (162) | Send Message
     
    Natural gas is up a bit, and there's some drought alleviation happening in the plains states. The main thing, though, is the crop forecast: just google "USDA crop forecast". I can see where they're coming from, a bit, because a bumper crop this year would push grain prices down substantially. Still, USDA predictions assume average weather, and what actually happens... who knows; could be wet, could be dry, could be hot, could be cold. This "bumper" forecast was also made last year, and look how that turned out (I haven't heard of this outlet before, but it's a good summary: http://on.wkyc.com/WaAIAs). Yeah, corn can't go up forever, but the current sell-off -- at least with RNF -- seems way overdone.
    23 Feb 2013, 02:25 PM Reply Like
  • rupenhoff
    , contributor
    Comment (1) | Send Message
     
    I learned my lesson with TNH. I sold at $120 and it shot up to $200+. I like RNF and will take the opportunity to add to my positions.
    24 Feb 2013, 09:35 AM Reply Like
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