A Big Upgrade for CF Industries

After spending much of the past year at a four-star rank, CF Industries (NYSE: CF  ) has impressed enough top-performing members of our 165,000-strong Motley Fool CAPS community to climb to five stars, the highest ranking. A total of 1,105 members have given their opinion on the fertilizer producer, with many of them offering analysis and commentary explaining the recent optimism.

Investors like the benefits that integrating Terra Industries brings to CF Industries, and see the company in an improved competitive position after the recent acquisition, one of many mergers in the fertilizer space. The growth in the agriculture industry is being fueled by increased global demand for food, which is expected to continue, in turn driving up long-term demand for fertilizer.

CF Industries is not alone in seeking a stronger position in the industry. Competitor Agrium (NYSE: AGU  ) recently delivered a hostile bid for Australian wheat exporter AWB so it can expand in Australia and Asia. Meanwhile, mining giant BHP Billiton (NYSE: BHP  ) is chasing after PotashCorp (NYSE: POT  ) to build its presence in the potash market. Agricultural processor Archer Daniels Midland (NYSE: ADM  ) also noted that it can spend up to $1 billion on acquisitions this fiscal year to capitalize on rising demand in its oilseeds business. Despite the increased activity, CAPS members still predict improving market share for CF Industries, boosting the bullish sentiment for the stock in CAPS.

Terra Industries helped add to CF Industries' second-quarter sales, and the acquisition nearly doubled the company's nitrogen production capacity. The company also expects its expanded sales and marketing network to help with growth and create better access to more sales channels. And similar to the bullish outlooks from potash producers Mosaic (NYSE: MOS  ) and Intrepid Potash (NYSE: IPI  ) , CF Industries anticipates a strong fall fertilizer season. With investors considering food one of the few safe havens during a prolonged recession, CF Industries has been earning more fans while its stock price has surged. Many CAPS members believe there are still more gains to be had.

Do you think CF Industries deserves its improved status? Add your thoughts in the comments box below on this page, or head over to CAPS to rate the company and check out all the information and opinions the community offers, absolutely free.

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Fool contributor Dave Mock recently upgraded his skateboard with new clay wheels, more rainbow reflective stickers, and even a flame decal. He doesn't own shares of companies mentioned here. The Fool has a disclosure policy.


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