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Strategies & Market Trends : Value Investing

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To: E_K_S who wrote (69303)	12/12/2021 1:04:56 AM
From: Elroy	Read Replies (1) of 78414

I don't know that UAN and CVI have a more complicated structure than other MLPs which have entwined ownership situations. UAN and value. Well, UAN has two manufacturing assets - that's it. Both make ammonia and UAN32 fertilizer. The price of ammonia and UAN32 fertilizer is about 4x higher than it was a year ago, and the variable and fixed cost to run the plants is probably about the same as it was a year ago, and the cost of the input required to make two the fertilizers (natural gas) is perhaps 33% higher than it was a year ago. You run any forecasting model with UAN32 at $600/ton (today's price) and the model spits out about $9 per quarter, give or take. What else can we want from a company, if not a quadrupling of sales prices and flat costs? If Carl Icahn sells CVI, the buyer of CVI will then own 36% of UAN the MLP. OK. So? i agree with Paul we're sort of beating a dead horse here, but I just everyone reading to know - UAN gonna pay you lotta money in the next three quarters. My hunch is when the next three quarters distributions are announced, the unit price of UAN will reset due to the transparency of the profit margins at current fertilizer prices. You been warned!

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