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Strategies & Market Trends : Value Investing
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To: E_K_S who wrote (75371)4/3/2024 2:20:31 PM
From: Elroy1 Recommendation

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E_K_S

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It is elevated from the previous level of about $70 because Icahn filed a SEC document indicating UAN is for sale. They're exploring sales options. People speculate they have a buyer lined up, or perhaps the filing is a way to let potential buyers know that CVR's two plants are for sale.

There was a newer similar fertilizer plant that had the same capacity as UAN's two plants combined which sold for an outrageoulsy high price. If CVR's two plants sold for the same value per production capacity ton, it would value CVR at something like $225 per unit.

Fertilizer prices are OK, but not super high like in the recent peak years. It's probably reasonable to expect $5-$10 per year at current price levels. But after spring planting, fertilizer prices usually drop, so it's hard to forecast much beyond the Q2 distribution. The next two distributions should be $2-$5 each. After that it depends on fertilizer prices and production efficiency, so really hard to forecast.
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