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

To: Elroy who wrote (66571)	2/18/2021 3:30:35 PM
From: E_K_S	Read Replies (1) \| Respond to of 78819

Go back 8 years and look at the price pre 10 for one reverse split. The stock would be $260/share. I believe I bought some UAN at that time between $24-$29 ($240 - $290 the pre 10-1 reverse split). I am skeptical about the company and management's commitment to preserve/maintain stock holder's equity valuation. There is/was always a large Capital investment (CAPx), acquisition of assets to diversify fuel inputs, more facility maintenance. Many years resulting in a loss and burning up the FCF. Net result, share price falls from $240/share to $22.60/share. You are going to have to raise the dividend a lot for many years to get back your $240/share original investment. It's a MLP too that requires a K1. I have averaged down over the years but still have some of those $240/share worked into my cost basis. So yes I am skeptical even if commodity prices move way higher. Management may just make another acquisition w/ all of that FCF and/or 10x their salary. Oh yea, It's different this time.

To: Elroy who wrote (66571)	2/19/2021 11:45:12 AM
From: bruwin	2 Recommendations Recommended By E_K_S Lance Bredvold Read Replies (3) \| Respond to of 78819

The reference to a payout of a $7/share Dividend got me thinking as to what that would mean in terms of what UAN would possibly have to earn in Total Revenue. Assume a Dividend payout of 30% of Gross Income. Number of shares = 11.28 million Dividend payout for company = 11.28 x $7 = $79 million. Therefore Gross Income = 79/0.3 = ~$260 million. If we take UAN's latest TTM Inc. Statement and ignore "Deprec.& Amort." as well as "Impairment", and assume that UAN pays at least 20% Tax, the best "Net Income" number would be about +$9 million ....... If we now take the Gross Income of $260 million and work backwards keeping (A), (B), (C) and (D) as before and take UAN's "Gross Profit" as being about 28% of its "Total Revenue" as it showed in the past ....... ...... it seems that UAN would have to attain a Total Revenue of about $1464 Million, which is between about 4 to 5 times greater than what it's managing at the present time. I wonder how it will turn out .......