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   Non-TechUAN - The variable distribution MLP that could go a long way


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From: Elroy9/29/2021 12:07:01 PM
   of 531
 
Fertilizer Prices Soar Near 2008 Highs on Supply Shocks, Concerns Sprout Over Sourcing Enough for 2022 U.S. Corn Acres

agweb.com

China halts phosphate exports

wisfarmer.com

China is banning the export of phosphate, a major component of commercial fertilizer, through 2022.

“Fertilizer prices have increased dramatically in recent years, and the news coming from China will more than likely help this trend continue,” said Theresa Sisung, field crops specialist for the Michigan Farm Bureau. “Farmers should talk to their retailers sooner rather than later to discuss their options for purchasing fertilizer for their 2022 crop needs.”

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From: Elroy9/29/2021 6:26:34 PM
   of 531
 
UAN futures price still moving higher.

cmegroup.com

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From: Elroy9/29/2021 9:42:06 PM
   of 531
 
These guys are similar to UAN with plants located in the Tampa area. They also refinanced 9% debt down to 6%.

LSB Industries Announces Pricing of $500 Million Private Placement of 6.250% Senior Secured Notes Due 2028

finance.yahoo.com

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To: Elroy who wrote (213)9/30/2021 3:27:13 PM
From: Area51
1 Recommendation   of 531
 
Finally took out $70 :-)
I was tempted to add some short term options but a little too expensive for me :-(

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To: Area51 who wrote (214)9/30/2021 4:25:53 PM
From: Elroy
   of 531
 
Yes, the option premiums are very expensive.

And I wonder how to time the units move in price. The good news has been just flowing in over the past two months, and the units haven't moved much until the past two weeks. So.......who knows what is going to get them going?

I think they're on their way to above $100, but the timing of the move is beyond me.

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To: Area51 who wrote (214)9/30/2021 4:34:56 PM
From: Paul Senior
1 Recommendation   of 531
 
The comments to Elroy's UAN posts on other threads both dismay and confuse me.

I understand that businesses at all times have negatives or risks that might impinge on stock prices. It just seems to me the positives are so overwhelming and certain -- as certain as can be, presuming no catastrophe at one of the plants or some unknown/unexpected government intervention occurring or something else - that that certainty will manifest itself in large upcoming distributions and a most likely rise in the stock price. Maybe not to the $hundreds, but up from $70. (But maybe greater than $hundred too if history repeats.) Maybe nothing's certain in the stock market. But the probability here has got to be high here, like maybe .95.

Why are not more people persuaded? Elroy makes the case for UAN excellently. Do all those people who're reading the posts and those who comment about UAN have something better? Surely there are some who, when the money would seem to be right in front of them, would overlook their concerns that it's an MLP (if that were a concern.). And no one has said, hey dump everything you own into this great opportunity. Why aren't there more people -- people who temper their risk by position sizing -- acknowledging that UAN might be very suitable for even a small investment? As I say, this lack of interest dismays and confuses me.

Oh well, I'm still a believer and still holding on.

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To: Paul Senior who wrote (216)9/30/2021 4:40:49 PM
From: Elroy
   of 531
 
Do all those people who're reading the posts and those who comment about UAN have something better?

This is the part I don't understand. Every stock has it's risks, but UAN seems extremely attractive now. Usually when friends ask me about which stocks to buy I don't have any EXCELLENT ideas, but this one is about as good a pick as I've seen in my investment lifetime.

If they don't like the UAN story right now, what DO they like?

Something amazingly unexpected like "one of the plants exploded last month" would have to happen to make it not work out.......

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From: Elroy9/30/2021 4:51:10 PM
   of 531
 
Crikey! UAN above $460/ton for Q1 2022 delivery now.....

cmegroup.com

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To: Elroy who wrote (217)9/30/2021 5:44:40 PM
From: Paul Senior
   of 531
 
At first - when UAN was first mentioned by you and the stock was much lower and before the debt reduction and distribution announcement - I figured it was the $10 bill-on-the-sidewalk analogy. (Two guys walking on the sidewalk. One guy says there's a $10 bill on the curb. Other guy says oh, it can't be. Somebody would've already picked it up already. First guy goes over an picks up the bill.) Maybe after the dividend distribution people who looked figured it was too late - the stock price was already up. But "too late" -- wouldn't that be an incorrect response, because if they actually figured it, looked at it, it doesn't seem to be late at all - at that time or now at $70.

To me, it doesn't have to be the best opportunity available. "The best" is arguable. For me, it just has to be good enough. And this is much better than good enough. I just do not understand how more people are not positive on this stock, and apparently are just very indifferent to it.

Perhaps we here and those on the UAN Yahoo thread have got it wrong, and we will be sorry we believed in UAN so strongly. Doesn't appear that way, and so far, we seem to be doing ok. Maybe better than ok. (That's stock buyers--I've no idea regarding options players.)

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To: Paul Senior who wrote (219)9/30/2021 11:18:45 PM
From: Lesser_Ape
   of 531
 
Well, you can add me to the "one of the best opportunities I've ever seen" crowd.

I think one issue is that commodities are so different from the tech stocks that have been working so well in the last few years. Plus, everyone knows that commodities are cyclical and prices will eventually come down, so they look at the stock and assume that it's already at the top of the cycle. And they don't want to be the bag holder.

I did find the movement in the forestry stocks (e.g. Interfor and Resolute) interesting. Lumber peaked in May and then plummeted, giving up most of the gains in a couple months. The stocks fell as well, but have recently bounced. Interfor, which had highs in the $37 range, fell to $23 in August, but has been trading in the low $30s range recently, though there hasn't been much of a bounce for lumber.

Stelco, in steel, is somewhat similar. At the first whiff of a correction, it has fallen from $50 to the $37 range. But steel hasn't fallen much at all.

One of my speculations is that people are trying really hard not to be the bag holder in these commodity stocks. So, they're basically only increasing the valuation for the shares as money actually gets added to the balance sheet. There's no credit given for future earnings.

And then, when the underlying commodity falls even a tiny bit, the shares get beat up. But because investors have been so conservative in trying to avoid being bag holders, a correction in the underlying commodity is actually already priced in. So the shares look cheap even with the lower commodity prices, which causes them to be bought again.

So for UAN, I think we're basically in the phase where people see it's gone up, assume they've missed most of the move, and are too frightened to invest because they're worried about being the bag holder when the cycle turns.

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