4-Star Stocks Poised to Pop: Terra Nitrogen

By Brian D. Pacampara | More Articles
August 26, 2009 | Comments (3)

Based on the aggregated intelligence of 135,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, nitrogen products producer Terra Nitrogen (NYSE: TNH ) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Terra's business and see what CAPS investors are saying about the stock right now.

Terra Nitrogen facts

Headquarters (founded)	Sioux City, Iowa (1991)
Market Cap	$1.98 billion
Industry	Fertilizers and agricultural chemicals
TTM Revenue	$779.9 million
Management	CEO Michael Bennett (since 1998) CFO Daniel Greenwell (since 2008)
Return on Capital (average, last three years)	70%
Cash / Debt	$95.2 million / $0
Dividend Yield	8.3%
Competitors	Agrium (NYSE: AGU ) CF Industries (NYSE: CF )
CAPS members bullish on TNH also bullish on	PotashCorp (NYSE: POT ) Vale (NYSE: VALE ) Apple (Nasdaq: AAPL )
CAPS members bearish on TNH also bearish on	First Solar (Nasdaq: FSLR )

Sources: Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS. TTM = trailing 12 months.

Over on CAPS, fully 1,107 of the 1,153 members who have rated Terra -- some 96% -- believe the stock will outperform the S&P 500 going forward. These bulls include pchristoph and danielthebear.

Late last month, pchristoph tapped Terra as a particularly tasty way to earn some income: "No debt, very nice margins and dividend. People need to eat."

In a pitch from last week, danielthebear planted even more bullish seeds:

I have seen this come up on too many growth and value screens to ignore it. [Terra] is in a basic, essential industry (Nitrogen fertilizer is essential for plant growth, soils are largely depleted and are not getting any better.) ... ROE is greater than 20 for a 5-year average with a 8.5% dividend, a P/E under 10 and no debt. Natural gas will rise but with that rise will come higher commodity costs so they will be able to charge more, offsetting the increased cost.

What do you think about Terra, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 135,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Apple is a Motley Fool Stock Advisor selection. First Solar is a recommendation of Rule Breakers. The Fool's disclosure policy always gets a perfect score.

Read/Post Comments (3) | Recommend This Article (6)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment icon found on every comment.

Report this Comment On August 26, 2009, at 11:55 AM, pondee619 wrote:

"Make your voice heard on Motley Fool CAPS today. More than 135,000 investors are waiting to hear what you have to say."
Brian:
If CAPs is so important and SO many want to hear what you have to say, WHY do you continue to avoid playing YOUR "poised to" stocks therein?
Is there any reason we should listen to the two fools cited in your article?
Report this Comment On September 29, 2009, at 11:00 PM, ozzfan1317 wrote:

I took a look at this company and at least in my opinion looks like an obvious buy.
Report this Comment On September 29, 2009, at 11:00 PM, ozzfan1317 wrote:

I took a look at this company and at least in my opinion looks like an obvious buy.

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