Why I'm Buying More CVR Partners

Nitrogen fertilizer producer CVR Partners (NYSE: UAN  ) just cannot catch a break lately. It was pushed aside during Carl Icahn's takeover bid for parent CVR Energy last year. A biannual turnaround at its sole facility at the end of 2012 pushed down onstream factors on its production lines and made sales, income, and dividend distributions appear weak, albeit artificially. And although a recent divestment from one of its holding companies seemed to spook investors earlier this spring, the number of shares outstanding was not affected. In the following video, Fool.com contributor Maxx Chatsko explains why he's adding to his personal position in the company.

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Comments from our Foolish Readers

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  • Report this Comment On June 30, 2013, at 5:55 PM, preemptive wrote:

    This guy doesn't have a clue.

    CVR didn't increase capacity by 50%. They converted ammonia to lesser value nitrogen products, which are sold at lower prices.

    The thesis that nat gas prices must go up giving CVR an advantage, is not playing out, with nat gas prices falling lately.

    The main factor affecting CVR's distribution is the price of UAN fertilizer, which has been declining year to date.

    The guy wants to protect his position. Good luck with that.

  • Report this Comment On July 01, 2013, at 3:30 PM, TMFBlacknGold wrote:

    @preemptive

    CVR Partners certainly did increase plant capacity by 50% earlier this year.

    http://www.cvrpartners.com/News/PDF/2013-01-09_UAN_Expansion...

    The expansion will allow the company to convert nearly all of its ammonia into UAN, or about 3,000 tons per day. Previous equipment could only handle about 2,025 tons per day, or about 70% of total ammonia production.

    Additionally, UAN is a higher margin product than ammonia.

    --Maxxwell

  • Report this Comment On July 17, 2013, at 9:51 PM, TruffelPig wrote:

    I think UAN is cheap right now - I buy some and add to my MLPs.

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