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Why CF Industries Holdings Inc. Shares Jumped Today

By Travis Hoium - Feb 19, 2014 at 12:00AM

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Is this meaningful or just another movement?

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of CF Industries Holdings (CF -0.61%) jumped as much as 10% today after the fertilizer maker reported fourth-quarter and full-year earnings.

So what: Quarterly revenue fell 3.6% from a year ago to $1.33 billion, but still came in ahead of Wall Street's guess of $1.26 billion. Net earnings attributable to stockholders were down 31% to $325.8 million, or $5.71 per share.

Now what: It was a tough pricing environment early in the fourth quarter for CF Industries, but prices recovered late in the quarter and that should help profits going forward. Management said it expects the higher demand and prices to continue in the first half of the year. This business is highly volatile, but with positive momentum and shares trading at slightly less than 10 times trailing earnings I think the stock has room to run higher.

Travis Hoium has no position in any stocks mentioned. The Motley Fool owns shares of CF Industries Holdings. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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CF Industries Holdings, Inc. Stock Quote
CF Industries Holdings, Inc.
$99.44 (-0.61%) $0.61

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