Fertilizer is a growth industry, in every sense of the word. Shares of No. 1 ranked fertilizer maker CF Industries gapped up 6.5% Friday and at one point early Monday they were up another 4.5% before pulling back for a nearly 1% gain. Also on Monday, the IBD SmartSelect Composite Rating for CF Industries stock rose from 94 to a near-best 96.
The new rating is a sign that CF Industries stock is outpacing 96% of all stocks when it comes to the most important stock-picking criteria. The market's biggest winners often have a 95 or higher Composite Rating in the early stages of a new price run, so that's a good starting point when looking for the best stocks to buy and watch.
EPA Move Could Boost CF Industries Sales, Profits
On Friday the Environmental Protection Agency proposed new renewable fuel standards that call for adding more biofuels to gasoline to make it cleaner. Companies like CF Industries and Bunge, that provide fertilizer to grow the crops that will be used to make biofuels, will benefit from the proposed rules change.
"Last week, U.S. Environmental Protection Agency (EPA) Administrator Lee Zeldin announced that EPA is proposing Renewable Fuel Standard (RFS) volume requirements for 2026 and 2027 that would strengthen American energy security and support American farmers," the EPA said in a statement on its website Monday.
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Among its other key ratings CF Industries carries a 96 EPS Rating and a 91 Relative Strength Rating. Its B+ Accumulation/Distribution Rating shows that funds are buying significant amounts of its stock.
CF Industries is trading in a buy range from a 98.25 entry from a cup without handle. Its stock dipped to a 67.34 low on April 8 amid the market correction, then started climbing. It traded around 101 Monday afternoon, up less than 1% for the day and 50% above the April low.
Earnings Popped 118% Last Quarter
In Q1, Deerfield, Ill.-based CF Industries posted 118% earnings growth to $1.98 per share. Revenue grew 13% year over year to $1.66 billion. The company has undergone a dramatic reversal from weaker numbers last year. The three quarters prior to last quarter CF reported a 15% drop in EPS, 18% growth, 14% growth then the surge to 118% last quarter. Sales followed a similar pattern.
CF Industries holds the No. 1 rank among its peers in the Chemicals-Agriculture industry group. CVR Partners and Intrepid Potash are also among the group's highest-rated stocks. The group itself ranks a lofty No. 17 on IBD's list of 197 industry groups.
This article was created automatically with Stats Perform's Wordsmith software using data and article templates supplied by Investor's Business Daily. An IBD journalist may have edited the article.
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