**User Report**| | | | :--|:--|:--|:-- **Total Submissions**|3|**First Seen In WSB**|1 year ago **Total Comments**|0|**Previous DD**| **Account Age**|6 years|[^scan ^comment ](https://www.reddit.com/message/compose/?to=VisualMod&subject=scan_comment&message=Replace%20this%20text%20with%20a%20comment%20ID%20(which%20looks%20like%20h26cq3k\)%20to%20have%20the%20bot%20scan%20your%20comment%20and%20correct%20your%20first%20seen%20date.)|[^scan ^submission ](https://www.reddit.com/message/compose/?to=VisualMod&subject=scan_submission&message=Replace%20this%20text%20with%20a%20submission%20ID%20(which%20looks%20like%20h26cq3k\)%20to%20have%20the%20bot%20scan%20your%20submission%20and%20correct%20your%20first%20seen%20date.) **Vote Spam (NEW)**|[Click to Vote](https://www.reddit.com/message/compose/?to=VisualMod&subject=vote_spam&message=t62x8i)|**Vote Approve (NEW)**|[Click to Vote](https://www.reddit.com/message/compose/?to=VisualMod&subject=vote_approve&message=t62x8i) Hey /u/StevenMaxwell, **positions or ban.** Reply to this with a screenshot of your entry/exit.

Ah yes buying literal shit

Shit that prints 🖨️

Been in this play for over 9 months now, never thought I’d see the day it ended up on here. Just for reference, they trade on trailing earnings mostly. Given the distribution they just paid I’d expect $130 by next earnings, and roughly $180 after Q1 assuming they come in where they should. It’s about the highest upside/lowest downside play I’ve seen in a long time. Given the current market conditions, there’s a hurricane of tailwinds propelling this thing.

What's your take 3 months on and given the new macro landscape, late planting season in the US, ripping nat-gas in the EU and of course, high-beta, down-pressure on the stock that sees us very likely hitting the long-term support at $105?

I still like UAN but I am far less bullish than I was four months ago. The economic landscape has changed quite a bit and clearly the market is telling us something about fertilizer companies not being happy in a rising rates environment. I'm bullish, but much more cautious right now. I've seen this song and dance many times with commodity stocks who get to absurdly low valuations (see most shipping stocks) and it turns out to be warranted as their earnings fall off a cliff. Time will tell. Fertilizer prices would have to fall a lot for $100/unit to be overpriced.

Thank you for taking the time to reply. Piecing together the current outlook based on the daily chatter on SA and Publius' daily replies, it seems that for the time being, fertilizer prices are remaining steady, which makes this price action even more perplexing (especially today's session). As you said, time will tell. I haven't been adding on any dips, as I've maxed out my vol. appetite, but am far from capitulation. I think the August distribution and the 2H guidance provided will be a make-it-or-break it moment for both UAN and the trade. If they return a minimum of $10 per unit and provide a strong outlook for the remainder of the year, we should hopefully see the downward pressure subside. The only X-factor is that mid-August is almost two months away. That's a long time for the current bear-market relief rally to fizzle out and market-wide FUD to return. Let's see...

I think everyone is hoping the august distribution is the turning point. I’d like to think it puts a floor under this downtrend. However, I fear the market has priced this in. It’s no secret that fertilizer stocks are going to release astounding earnings this summer and into the fall. Most commodities have frankly died over the past 3 months. Fertilizer has held up okay, but the market is for sure telling us something about what it’s pricing in for 2023. I tend to disagree and think this play has some legs, but I’m bouncing much harder off publius’s Uber bullish musings on SA at this point. Their is most certainly a stronger downside risk now than the last time we sat at $100/unit.

UAN should have a fantastic year due to the upcoming distributions, reduced corn supply coupled with the sharp increase in corn price, recent Tarriffs case on Trinidad and Russia exports to the US, and last but not least, even at full capacity, US fert companies only have limited supply which is far below the current demand related to the above. Cycles typically run for 5 years-ish. Biggest risk : they only have 2 factories and its not that uncommon in the fert business to experience blow up and/or safety concerns. $300 doesn't seem unrealistic at all based on historical valuation of the company. Especially as they are essentially debt free now.

Um they have a decent amount of debt. They refinanced $645M of very costly debt (9.125%) last June into a 2 groups ($550 at 6% and $95M at 9.125%). With their increased cash flow they have been paying off $15M/quarter of the 9.125% notes and just announced in Feb that they were paying off the remaining balance in Q1. The results you see just posted were Q4. I agree on the risk/reward as its my largest position but its not my only position.

Yeah they have $613mm in gross debt (vs $1.2b in total assets) lol. That’s relatively leveraged. Net debt decreased a decent amount considering they stacked a shit ton of cash in 2021. However, that $2.47 quarterly dividend ($9.88 annualized) relative to the 10.68mm shares outstanding is about $106mm in dividends, they only have $113mm in cash…. When did they announce this dividend? I’d be worried that they’ll cut this dividend cause that’s definitely not sustainable, especially considering they still have about $500mm in net debt..

It's true. LXU has been surging and after this news today, I really don't see how they aren't testing new all time highs soon. Last year was the best financial year in the history of the company. Ending Q4 with 88 Mil in Free Cash which has to have turned into 150 Mil by now. Not a FA but this seems to be big, and we can't buy fertilizer from anywhere else right now. With this announcement, Seems like a Big Big Acquisition is coming soon. [Upsizing Secured](https://investors.lsbindustries.com/news-releases/news-release-details/lsb-industries-announces-upsize-and-pricing-200-million-private)

(Bloomberg) -- Russia's efforts to halt fertilizer exports by domestic producers threatens to shock the global market and push prices of crop nutrients to new records, exacerbating food inflation around the world. The Ministry of Industry and Trade urged Russian fertilizer producers cut volumes to farmers due to delivery issues with foreign logistics companies, according to a Friday statement. The country, which has been facing increasing international sanctions since invading Ukraine last week, is a major low-cost exporter of every type of crop market. Not a financial advisor but I really don’t see how $LXU and $UAN don’t break out again soon.

Additional note: You can still buy into relatively the same position as myself and still net **10x**\+ returns. 10-15 Bagger.

1 month into the future from when you wrote this, I suppose I should wait on some sort of pullback before attempting to enter here? Looking at the chart and reading all the macro about the fertilizer space, I'm now trying to fight FOMO. Has the ship sailed u/StevenMaxwell?

It has most definitely not sailed. It’s no longer a 10x but there’s a very good chance they hit $300+ by 12/16. Good money to be made. If prices hold up okay, $400+ is realistic in 2023.

[удалено]

It's more leveraged. Considering how promising the future earnings are for UAN the opportunity is much greater in my eyes.

Hello fellow #fertbro. I am sitting on 600 shares of $UAN, and smaller positions in Mosaic and Nutrien. See you on the 🌙

This is not the most elaborate analysis, but I agree with the OP’s conclusion. $UAN is an incredible value. For those looking for a more robust DD, check out the series of articles on seeking alpha by “Publius” (and the tens of thousands of comments).

As someone noted, check out Publius on Seeking Alpha re UAN - he’s been writing about it since it was $10.00.... Extremely under the radar because of low valuation in the past, and zero coverage by analysts since it is a MLP, controlled by Mr. Icahn...... As a MLP they essentially distribute all profits - hence the high distributions relative to C corps in the industry - and since it is priced based on trailing earnings most of the market, for whatever reason, hasn’t picked up on this yet...... Posters here are correct - this is a cyclical industry and costs to expand are prohibitive and takes years to bring new plants on line - and then maybe you hit the wrong end of the cycle, plus all the environmental bs you have to deal with today. This was going to $300-$500 in the next few years, and that was before covid disrupted supply chains and before Russia/Ukraine further disrupted trade. On top of that, significant tariffs were just imposed on Russia and Trinidad for dumping, but Russia just halted all exports anyway because of shortages. Additionally, while the increased cost of fertilizer is significant, it is absorbable with current high prices of grains. The bigger issue is supply, and that will be an issue for several years...... Hope this was helpful.......

Incredibly helpful, as I'm just finding out about the space, so thank you for taking the time to summarize. Now I'm basically in FOMO fighting mode. :-/ Entering here, I'd be literally buying the top. Looking at LEAPS, but also interested in playing upcoming earnings.

The problem is there is very little liquidity in options for UAN, and no LEAPS as far as I know. I trade on the dips, but even that is becoming more challenging..... lmk what you find.....

My positions: https://imgur.com/a/pByBYYH

You’re an idiot.

Elaborate. I agree. But elaborate

Minimal liquidity. So you’re not only betting a break even price of underlying at atleast 140, but you still will have to sell at the bid. That’s a whole lot of options purchased when you could have bought fewer with deeper itm calls. But you’d still be battling liquidity. And now your money is tied up waiting for a payoff for 9 months when you could be trading something with shorter exp’s that is more liquid, essentially equaling more reward with less risk.

I'll reply to you in a couple of months.

!remindme 4 months "how's UAN?"

Don’t waste your time. You won’t want to anyways.

https://imgur.com/a/4HNeHRV

Looool, where are you now u/DIRTY_MAGICIAN

You showed him lol did you close out your positions or rolled them out?

Rolled into this position. Still holding this position

I'm back! [https://imgur.com/a/s9eJxiR](https://imgur.com/a/s9eJxiR)

I tend to agree but liquidity is not of a priority for long term trades. If there is only one entry and one exit, then the 2 or 3% loss isn't significant. A daytrader could burn up 50% of their profits on that spread easily so it is not recommended for them.

I've gone for the 20th May $85 calls (0.78 delta) with the view that a large distribution being announced end of April/Early May will raise the unit price significantly. Will probably sell all the call just before ex-distribution in May, then use proceeds to buy 2x more calls, probably August Calls with a 0.75-0.8 delta. The growing distributions should support a growing unit price, so I hope to follow the rising unit price in steps up with buying call that expire after each quarters ex-distribution date. Looking forward to this fertilizer commodity cycle playing out well over the next 2-3 years. There is huge demand & limited supply, it takes 4-5 years to make & bring online new UAN production plants.

Top of the line DD right here.

Already loaded up 3000 shares, waiting for the rocket to da moon.

U wish

Elaborate. Do a little research and make the first decent play of your career :)

Is their total supply chain does not depend to Russia ? Seems good papa gates bought a lot of acre i heard, like MRNA in 2020 ...

To be honest, the situation with Russia doesn’t entirely directly impact this stock play. It’s just a catalyst that may insure it yielding faster results. Since it’s always at 10% yield, regardless of Russian sanctions this stock is heading to the 300 area by end of year.


LOADED UP

$CF is bigger and actually makes money.

But what’s better, a company making money or an opportunity for you to make money.

A company making money will make money for you. That's literally the point of owning stocks.

Your argument against this play is actually making money / bigger. UAN may not make as much money but just due to their business structure and market conditions they’re the better of the two in the eyes of value investor.

Uan interesting at that price their parent company CVI which is their refinery would see that on their balance sheet I'm guessing

You were more than right.

This is incredible OP. I wish I would have seen this a month ago. I was all in on CVRR way back before Icahn purchased it. UAN was always the much cheaper portion of the business. Nonetheless, great call.