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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Cf Industries Holdings, Inc. (XNYS:CF) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
CF
Name:
CF INDUSTRIES HOLDINGS, INC. (XNYS:CF)
Sector:
1.32B
Industry:
Agricultural Inputs
CEO:
Mr. W. Anthony Will
Total Employees:
3,000
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is -7.04% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF CF INDUSTRIES HOLDINGS, INC.(CF) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND AGRICULTURAL INPUTS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
106.86
One Month Price Target:
$107.46
Six Month Price Target :
$110.46
Likely Price in One Year's Time:
Ticker:
$114.06
Likely Trading Range Today Under (Normal Volatility)
$106.49
Price Upper limit ($) :
$107.6
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$100.31
This week:
$92.2
This month :
$77.55
Other Primary facts
Market Cap:
20.50B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
199.26M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
16.24%
-15.39%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$137.23
$123.00
$76.49
$90.72
Medium risk (<10%) entry points
Buy Call
Sell Call
$118.37
Buy Put:
Sell Put:
$115.33
$95.31
$98.39
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
CF
Sharpe Ratio:
5.40%
Comparison:
CF, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 45.04% higher than the industry
& ratio is 137.01% higher than the market/S&P 500 average
Average Returns/Yield of
CF
Daily returns:
0.17%
Weekly returns:
0.87%
Monthly returns:
3.50%
Yearly returns:
42.20%
Comparison of returns:
Average annual returns/yield (last 3 years) is -0.60% below industry average
Classification:
CF, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.77
Statistical test of Returns:
CF has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.07%
Weekly Volatility:
6.87%
Monthly Volatility:
13.74%
Yearly Volatility:
47.59%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
4.46%
Volatility in last five trading days has been 45.35% above long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-6.13%
Weekly VaR:
-13.72%
Monthly VaR:
-27.43%
How Much Can the price of
CF
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-22%
Worst case (decline):
>85%
This translates to price declining to:
$83.09
This translates to price declining to:
$16.03
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
CF is a 93.62% riskier investment compared to the market/S&P 500 & is 65.87% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -24.23% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
CF
Beta in relation to market/S&P 500--1.00
Expected beta in 1 year's time:
0.661
Expected beta in 3 year's time:
0.934
Unlevered (debt free) Beta:
0.629
Beta in relation to Nasdaq (XNAS):
0.674
Beta in relation to all global stocks::
0.923
Beta Comparison & Analysis
Beta of competitors/peers::
1.295
Beta is -22.61% lower than peers
Average Industry Beta:
1.358
Beta is -26.20% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
1.36%
Sustainable growth rate is -92.03% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.319
Alpha is 7.35% above industry average alpha yield
Alpha is 2033% higher than market/& is unsustainably high
Analysis of Cost of Capital of
CF
Equity cost of capital:
0.100
Equity cost of capital is -19.58% below industry mean WACC
Unlevered (without debt) cost of capital:
6.29%
Before-tax cost of debt:
9.94%
After-tax cost of debt:
7.85%
Overall debt rating:
Non-investment grade (junk/speculative grade
Weighted average cost of capital (WACC):
7.85%
WACC is 2.18% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$41.95
Revenue growth rate per share of (3Y):
3.15
Annual revenue growth rate is 34.92% above the industry average
EPS:
$7.75
Expected Annual growth rate of EPS (3Y):
23.70%
Expected future EPS growth rate is 76.17% higher than the Agricultural Inputs industry
Free cash flow (FCF) per share:
$15.23
Balance sheet equity growth per share: 4.19%
Equity growth rate per share is -93.74% lower than the industry
Debt per share
$15.63
EBITDA per share
$17.94
Valuation Analysis Today of
CF
P/E Ratio:
8.76
P/E Ratio of Competitors/Peers:
4.06
P/E ratio is 115.81% higher than main peers & is -40.65% lower than the industry
Stock price/value with industry average P/E ratio: $114.45
CF is -6.63% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $33.72
Present value of the expected future dividends only: $20.09
P/S (Price to Sales ratio):
2.55
Price to sales ratio is 17.31% above the industry mean
P/B (Price to book value ratio):
3.15
Price to free cash flow: 7.01
-
Net income growth rate (3Y):
254.79%
Net income growth rate is -19.91% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 3.88%
Dividend yeild: 1.22%
Previous Dividend: $0.40
Previous adjusted dividend: $0.40
Previous Dividend: $1.30
Expected next dividend best case: $0.43
Expected next dividend worst case: $0.37
Average dividend payment (long-term): $0.31
Average dividend increase/decrease (growth rate) % per period: 3.33%
Expected next dividend payment date: 29/08/2022
Expected next dividend record date: 15/08/2022
Expected next dividend declaration date: 26/07/2022
Previous dividend payment date: 31/05/2022
Previous dividend record date: 16/05/2022
Previous dividend declaration date: 27/04/2022
Dividend History:
2022-05-13--$0.40
2021-11-12--$0.30
2021-05-14--$0.30
2022-02-14--$0.30
2021-08-13--$0.30
2021-02-12--$0.30
Dividend growth rate is -126.82% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
77.84%
Net debt to equity ratio:
27.11%
Debt to assets ratio:
22.60%
Net debt to assets ratio:
7.87%
Debt-to-asset ratio is -51.45% below industry average
Ability to repay debt:
Interest coverage ratio:
9.71
Interest coverage ratio is -21.96% less than industry average
Looking forward:
Debt growth rate:
-8.22%
Annual debt growth is 6% higher than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.525
Statistical significance of correlation:
CF has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.437
Stock price is 19.95% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.437
Correlation of price movement with Nasdaq (^IXIC):
0.067
Covariance of price movement with the market:
0.12
Kurtosis
3.605
Returns have moderate fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.237
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
CF
Gross Profit Margin Ratio:
169%
Operating Profit Margin Ratio:
37.57%
Operating profit margin is 214.59% higher than the industry
Net Profit Margin Ratio:
169%
Effective Tax Rate:
23.77%
Effective tax rate is 70.26% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
41.20%
Return on equity (ROE) is 53.87% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
11.96%
Return on assets (ROA) is 78.68% higher than the industry
Financial Leverage:
1.3x
Current Ratio:
1.72
Current ratio is -2.02% below industry average
Cash Conversion Cycle (days):
36.6
Cash conversion cycle is 75.53% above industry average
The remaining useful life of property plant & equipment is: 3.6 years
Stock based compensation to net income ratio:
0.61%
In-depth Efficiency Analysis
Revenue generated per employee:
2.8M
Each employee generates 44% more revenue than industry average revenue per employee
EBITDA generated per employee:
1.2M
Each employee generates 88% more EBITDA than industry average revenue per employee
Profit generated per employee:
549.7K
Each employee generates 75% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
439.7K
Each employee generates 1009% more free cash flow than industry average revenue per employee
Assets/Capital per employee
3.3M
Each employee generates 1009% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
CF
THE MOSAIC COMPANY (XNYS:MOS)
Aluminum Corporation of China Limited (XNYS:ACH)
Vedanta Limited (XNSE:VEDL)
Suzano Inc. (XNYS:SUZ)
Forum Energy Metals Corp. (XTSX:FMC)
Teck Resources Limited (XNYS:TECK)
ICL GROUP LTD (XNYS:ICL)
WESTLAKE CORPORATION (XNYS:WLK)
EASTMAN CHEMICAL COMPANY (XNYS:EMN)
Current Analyst Ratings
Strong buy�8%
Buy�17%
Hold�38%
Sell�8%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
8.36B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
4.56B
3.80B
-
112.00M
232.00M
-
- 16000.00K
216.00M
37.00M
368.00M
892.00M
3.58B
3.14B
1.65B
2.80B
666.00M
1.65B
Statement of Cash Flow
Date:
Period:
208.00M
Differed Income Tax :
- 2000.00K
Stock Based Compensation :
10.00M
Change in Working Capital :
110.00M
Accounts Receivables:
- 185000.00K
Other Working Capital:
285.00M
Other Non-Cash Items:
14.00M
Net Cash Provided by Operating Activities:
1.39B
Investments in PP&E:
- 63000.00K
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
2.62B
-
2.62B
679.00M
488.00M
42.00M
3.83B
7.14B
2.09B
44.00M
84.00M
-
595.00M
9.96B
-
13.78B
629.00M
587.00M
408.00M
598.00M
414.00M
2.23B
3.12B
658.00M
4.80B
-
7.03B
2.00M
2.91B
- 266000.0K
1.36B
March 31, 2022 at 6:00:00 AM
4.78B
4.00B
11.03B
-
3.70B
1.1B
-
1.00M
- 62000.00K
-
-
- 121000.00K
- 64000.00K
- 154000.00K
- 339000.00K
- 1000.00K
989.00M
2.62B
1.63B
1.39B
- 72000.00K
1.32B
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
CF
2023
2024
2025
2026
2027
$102.03
$108.90
$116.24
$124.07
$132.42