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CF Industries (CF) is a Top-Ranked Value Stock: Should You Buy?

Zacks Equity Research
·2-min read

Taking full advantage of the stock market and investing with confidence are common goals for new and old investors alike.

Many investors also have a go-to methodology that helps guide their buy and sell decisions. One way to find winning stocks based on your preferred way of investing is to use the Zacks Style Scores, which are indicators that rate stocks based on three widely-followed investing types: value, growth, and momentum.

Why Investors Should Pay Attention to This Value Stock

Finding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, and Price/Cash Flow to highlight the most attractive and discounted stocks.

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CF Industries (CF)

CF Industries Holdings, Inc., headquartered in Deerfield, IL, is one of the largest manufacturers and distributors of nitrogenous fertilizer and other nitrogen products globally. The company’s principal nitrogenous fertilizer products are ammonia, granular urea, urea ammonium nitrate solution (UAN) and ammonium nitrate (AN).

CF is a Zacks Rank #3 (Hold) stock, with a Value Style Score of A and VGM Score of A. Shares are currently trading at a forward P/E of 5.3X for the current fiscal year compared to the Fertilizers industry's P/E of 5.3X. Additionally, CF has a PEG Ratio of 0.9 and a Price/Cash Flow ratio of 9.6X. Value investors should also note CF's Price/Sales ratio of 2X.

Value investors don't just pay attention to a company's valuation ratios; positive earnings play a crucial role, too. Two analysts revised their earnings estimate upwards in the last 60 days for fiscal 2022. The Zacks Consensus Estimate has increased $0.33 to $19.51 per share. CF has an average earnings surprise of 2.5%.

With strong valuation and earnings metrics, a good Zacks Rank, and top-tier Value and VGM Style Scores, investors should strongly think about adding CF to their portfolios.


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