Mike Cintolo
Cabot Top Ten Trader
Geoffrey Seiler
Bullmarket.com
Sy Harding
Street Smart Report
Nicholas Vardy
Bull Market Alert

CF Industries: Drought beneficiary?


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by Leo Fasciocco, editor Ticker Tape Digest

CF Industries Holdings (CF), which produces fertilizer products, is our latest breakout buy; the stock moved above its breakout point at $201.88 and we are now targeting a move to 240.

The U.S. is suffering the worst  drought in 56 years. With nutrient deficiencies in the soil in the farm belt, some analysts believe there will be strong demand for fertilizer products.

CF's tape action shows strong institutional buying as the stock has broken out from a 12-week, cup-and-handle base. The move carries the stock to a new all-time high, which is bullish.   


This year, analysts are forecasting a 15% increase in net to $26.43 from 22.90. The highest estimate on the Street is at $29.55.

Net for the upcoming second quarter should jump 29% to $8.84 a share from $6.87 a year ago. The highest estimate is at a robust $9.85.

We see good chances for at least a modest upside surprise. The prior four quarters CF topped the consensus estimate by 22%, 5%, 7% and 16%.

Going out to 2013, the Street projects a 21% drop in net to $20.83 against the anticipated $26.43. It will be important to see if the forecast is lifted because of the drought. The highest estimate for the year 2013 is at $25.66.

Institutional sponsorship is very good. A key fund buyer recently was 5-star rated Fidelity Growth Company Fund which purchased 210,000 shares. Another key buyer was 5-star rated JPMorgan Large Cap Growth Select Fund which added 87,600 shares.

Learn more about this financial newsletter at by Leo Fasciocco's Ticker Tape Digest.

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