Hedgeye CEO Keith McCullough is adding CF Industries (CF) to the short side of Investing Ideas. Below is a brief note.
During market corrections we obviously don't get as many SELL ideas moving towards the top-end of my Risk Ranges...
That's where patience and process matter. CF Industries (CF) is the kind of short Industrials analyst Jay Van Sciver is looking for (rising costs with little to no pricing power).
Here's a good summary on those fundamentals from his Industrials Pro research product:
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CF | Price, Volume, Capacity CF Industries reported higher realized prices across its nitrogen products, which was well anticipated, but production was lower than anticipated. CF cut 2021 production to the lower end of previous forecasts. There are several longer-term issues with CF. Greener solutions could displace CO2 emitting Haber-Bosch processes. Capacity is set to continue increasing in coming years leading to price-limiting production growth. 2022 estimates moved higher after the release but Urea, UAN, and Ammonia prices will have the key impact on actual results. Urea prices peaked out in June, although remain higher in 3Q than 2Q. Time and capacity are likely on the side of the bear case. |
Sellem on green,
KM
