Terra Nitrogen Company, L.P. (NYSE:TNH)

CAPS Rating: 5 out of 5

The Company is a producer of nitrogen products and methanol. It also produces anhydrous ammonia, ammonium nitrate and nitrogen solutions in the United Kingdom.


Player Avatar TMFLegendPhoenix (24.26) Submitted: 9/27/2011 11:09:16 AM : Outperform Start Price: $107.58 TNH Score: -63.27

I bought shares of Terra Nitrogen a few months ago and it had been one of my favorite stocks. While the price was fast approaching $200/share I often lamented the small number of shares I had purchased. All of a sudden, shares of TNH had dropped by about 30% in the last couple of weeks. Before I initially bought shares of Terra Nitrogen, my research began by asking "What's so great about this company?" this time around I've been trying to find out "What's wrong with this company?". My conclusion is:
* This is the same company that I believed in when I first invested: 10% annual distribution and solid management
* The fertilizer industry is still poised to benefit from agriculture commodity growth as the world's population continues to expand.
* Although CF Industries Holdings Inc. (NYSE:CF) (Terra Nitrogen's general partner) probably has enough cash to buy the remaining 25% of TNH's shares they don't own (as stated in CF Industries SEC 10-Q filing) – they have not announced they plan to do so and I don't see why they would.

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Member Avatar oldman144 (< 20) Submitted: 12/28/2011 12:07:24 PM
Recs: 2

Well, it's Europe -- again-- as far as stock prices go. Terra Nitrogen is still the same company with the same financial positives. The financial thrashings of Europe affect companies that have absolutely no connection or business with Europe. Sadly, there is no consistency except inconsistency.

Member Avatar TMFLegendPhoenix (24.26) Submitted: 12/29/2011 4:27:17 PM
Recs: 0

When you can recognize a company who has no connection to the reason its stock price has been beaten down (like the example you point out, oldman144), you have a distinct advantage to gain from the situation. It's a great time to buy when the financials for a company remain strong, yet the price drops due to unrelated forces.

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