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Strategies & Market Trends : Value Investing
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To: Paul Senior who wrote (69301)12/11/2021 10:21:46 PM
From: FIFO_kid21 Recommendation

Recommended By
E_K_S

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I have a small position in UAN. It was acquired when Elroy recommended it realizing the reverse split had created a great deal of operating leverage coupled with the fundamentals turning very positive and so far have held it. It has not been a significant position for 2 reasons the MLP structure and the stock had already gone up significantly from the $8-9 level at the Nov. 2020 low. Subsequently, I have sold out of the money puts on UAN at roughly around a .20 delta 4 times and acquired a slightly larger position in IPI around $30 when discussion of the fertilizer comps were made on the UAN board a few months ago seeing the performance of that company had lagged and was cheapest company on an EV/EBITDA basis.

Any company that is highly cyclical has to be carefully monitored for information to sell before the lemmings leave ship so Elroy's consistent posting on the macros in the sector has been a very helpful service from him. From experience it is usually very challenging investing in any cyclical sector on momentum. It is by far best to be contrarian with a Ben Graham approach.

EKS- With regard to CVI it was a single entity with 2 operations until Icahn acquired his stake and subsequently restructured the company to its current form. CVI was one of my major buy targets during the 2008 financial crisis knowing its multiple unexploited advantages at the time the refining coke feedstock for its fertilizer operation as well as its major advantages in refining spread from benchmark crude spreads. I sold the company when RINs started to negatively impact companies in the refining sector who had no renewable operations as well as the bullish mode in the ag sector was starting to reverse. Q1 2013 is when I took the cost free profits in CVI.
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