re: Stocks...

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I've done consulting work for all 3 and am familiar with the industry.

The fertilizer industry has been very volatile over the years. At times fertilizer plants are like printing your own money; other times they struggle to survive. It is largely a function of natural gas prices and the capacity of existing plants. From that regard the industry is a good investment now. Maybe 25% of the industry was shut down several years ago when natural gas prices spiked over $10 and very little of that capacity can come back into operation. Meanwhile the price of natural gas has fallen and so the US plants are making very good money. There is no indication that natural gas prices will go much higher because the horizontal drilling technique used in shale deposits has increased the supply of natural gas more than was expected a few years ago and there are shale deposits that are still entirely untapped.

Now TNH itself is interesting. Terra Nitrogen was actually 2 stocks, TNH and TRA. CF Industries bought TRA which is all of the Terra plants other than the Verdigris Oklahoma site. That is probably the reason for the drop in TNH, it is not clear exactly how TNH will be structured as far as upper level management and I could see them inheriting a lot of overhead left over from Terra's headquarters in Sioux City as CF Industries absorbs the other plants. The Verdigris site is a good (efficient) fertilizer complex though and well managed. The stock is paying an excellent dividend and with the recent drop I think it is a good buy. Thanks for the question because I intend to buy some.

One caveat is that fertilizer companies have had a great run in large part because of our stupid ethanol policy. Corn farmers have been buying fertilizer like crazy because corn is so profitable. If our policy on corn changes then fertilizer stocks could suffer.

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I've done consulting work for all 3 and am familiar with the industry. The fertilizer industry has been very volatile over the years. At times fertilizer plants are like printing your own money; other times they struggle to survive. It is largely a function of natural gas prices and the capacity of existing plants. From that regard the industry is a good investment now. Maybe 25% of the industry was shut down several years ago when natural gas prices spiked over $10 and very little of that capacity can come back into operation. Meanwhile the price of natural gas has fallen and so the US plants are making very good money. There is no indication that natural gas prices will go much higher because the horizontal drilling technique used in shale deposits has increased the supply of natural gas more than was expected a few years ago and there are shale deposits that are still entirely untapped. Now TNH itself is interesting. Terra Nitrogen was actually 2 stocks, TNH and TRA. CF Industries bought TRA which is all of the Terra plants other than the Verdigris Oklahoma site. That is probably the reason for the drop in TNH, it is not clear exactly how TNH will be structured as far as upper level management and I could see them inheriting a lot of overhead left over from Terra's headquarters in Sioux City as CF Industries absorbs the other plants. The Verdigris site is a good (efficient) fertilizer complex though and well managed. The stock is paying an excellent dividend and with the recent drop I think it is a good buy. Thanks for the question because I intend to buy some. One caveat is that fertilizer companies have had a great run in large part because of our stupid ethanol policy. Corn farmers have been buying fertilizer like crazy because corn is so profitable. If our policy on corn changes then fertilizer stocks could suffer.

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WRE
EPHCX

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