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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: LTBH who wrote (52827)	11/19/2013 10:32:28 AM
From: E_K_S	Read Replies (1) \| Respond to of 78657

LTBH - Another value proposition I discovered is their facility uses petro-coke as the feed-stock not NG. This is a huge by-product by the refineries from processing the Canadian Tar Sands Oil. Now the EPA is getting on the refiner's case to develop better methods to dispose of this by-product. In fact, EPA may penalize refiners if petro-dust is not stored correctly. How do you think the UAN margins would be if they were paid by the refiner to use their petro-coke? I like their unique technology which will reduce the unexpected by-product from refining that Canadian Sand Oil. Since Buffet is committed to those Canadian Sands, maybe he would be committed to more UAN type facilities. I am not sure if UAN holds any patents on their proprietary manufacturing technology but that could be a big bonus for the company if/when refiners see their petro-coke supplies build up. In Chicago, piles of petroleum coke suggest the future of Canadian tar sands oil So far, neighbors have blamed BP and Koch Industries, which owns the yard with Chicago's pet-coke piles. BP and Koch say there’s been a misunderstanding so far. BP says that it wasn’t actually sending more pet coke than usual to the Chicago yard this summer. Seems like a win/win for the companies and public if everyone can get on the same page. EKS

To: LTBH who wrote (52827)	10/1/2015 8:32:04 PM
From: E_K_S	1 Recommendation Recommended By Mattyice Read Replies (1) \| Respond to of 78657

CVR Partners, LP (NYSE: UAN) - upped shares by 14% @ $9.37/share Rentech Nitrogen Partners, L.P. (NYSE: RNF) - started position @ $11.79 that will result in 20% more UAN shares -------------------------------------------------------------------- Decided to start building my position in UAN. These companies manufacture fertilizer, a very cyclical commodity. In August 2015, UAN proposed an acquisition of RNF (1.03 UAN for each RNF adn $2.75/share cash). UAN almost doubles their market cap w/ the acquisition. RNF will sell their Pasadina CA manufacturing facility and keep their East Dubuque, Illinois plant. The acquisition should close no later than May 2015 and possible earlier. The partnership expects to realize meaningful synergies of at least $12 million, from SG&A cost savings, logistics and procurement improvements, and more strategic and efficient marketing of the combined products. Moody's: Rentech Nitrogen's announced merger with CVR Partners is a modest credit positive The combined operations should help stabilize cash flows by reducing operating expenses, production will now be in two U.S. owned facilities w/ exclusive U.S. domestic distribution (no impact by strong $US), and new UAN management s/d be able to have a lower cost of production while increasing total plant capacity. My bet is that fertilizer prices are now at/near cycle lows and in the next 12-24 months prices (and earnings) will/should be near cycle highs (or at least rising). Graham No. values for BOTH companies are significantly higher than current prices ( anywhere from 75% to 85% undervalued) but not true Graham candidate stocks as EPS were/are negative more than once over the last 10 years. UAN BEFORE merger RNF Before merger ----------------------------------------------------------------------------- RNF investors believe the new UAN management will be better and more profitable operators than the previous management. From the charts above, RNF's performance since 2012 is/was not that good. I especially like UAN's FCF and cash flow/share performance. Distributions will vary because of the nature of the cyclical price of fertilizer. I expect distributions to rang from 10%-15%. The value kicker will be the lower cost of production from operating two plants, better production/distribution from those plants and the eventual increase in BV when UAN's management completes the business consolidation both on the production side and the customer side. This is a 24-36 month hold. I plan to peel off shares if/when shares prices get back to $20.00/share. This is an MLP so there are K1 reports that need to be processed. EKS