Hey board, UAN is worth a look. I posted this on the Income board a week or so ago.
For those of you who don't know about it, UAN is a variable distribution MLP that makes fertilizer. Fertilizer prices low = no distribution. That has been the case in 4 of the past 5 years.
Well, fertilizer prices are rocketing.
EKS and I have been suffering in this one for years. Maybe the fundamentals (fertilizer prices) have finally turned around. The UAN share price hasn't turned up much yet. From 2016 to 2019 UAN was about $30, and didn't pay a regular distribution, and so we sat and waited. In the Pandemic UAN dipped to $6, and is now only $22. When it didn't pay a distribution before, it was $30. If it decides to pay a distribution in 2021, and hopefully for a few years following, who knows where it will go to (depends on the size and perceived sustainability of future distributions, which are completely unknown at the moment). But....when it paid nothing for a few years, UAN was $30. Today, with fertilizer prices rising UAN is $22.
I'm no fertilizer expert, but I like the newsflow......
Nitrogen markets firm as urea values continue to hit new highs
profercy.com
stooq.com
UPDATE!
Wed after market close three large fertilizer makers (MOS, CF and NTR) all reported Q4 2020 (which was nothing special) and all said that prices for fertilizer have been going up up up in Q1, and the remainder of 2021 looks really good for fertilizer prices.
UAN is still cheap relative to where it was when it DIDN'T pay a distribution for years. If fertilizer prices just stay where they are today, UAN is likely to pay quite large distributions in 2021 in my opinion.
Fertilizer! Better than Bitcoin! Well, lets see...... |
