Analyst Ben Isaacson of Scotiabank Global Banking and Markets is paying attention to CF Industries Holdings, Inc. (CF), as the stock was not adversely affected by the decline in the nitrogen market, and the company is positioned to increase shareholder value in the future because of a number of factors.
“100% of CF’s EBITDA is based on nitrogen, and even though we’ve had a downturn in the last couple of months in the nitrogen sector, the stock has not moved proportionally lower,” Isaacson said.
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Additionally, Isaacson points to an activist investor who may have driven several changes at the company over the last year.
“Many believe [this investor] caused, one, the old CEO exit; two, a 150% dividend increase in the last year; and three, advocated for the company to sell off its noncore — phosphate — assets,” Isaacson said.
“In addition to strong free cash flow growth, there are quite a few catalysts left for CF to realize greater shareholder value over the next year or so. We do like the name,” Isaacson added.
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