4-Star Stocks Poised to Pop: CVR Partners

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Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, nitrogen fertilizer producer CVR Partners (NYS: UAN) has earned a respected four-star ranking.

With that in mind, let's take a closer look at CVR's business and see what CAPS investors are saying about the stock right now.

CVR facts

Headquarters (founded)Sugar Land, Texas (2007)
Market Cap$1.82 billion
IndustryAgricultural chemicals
Trailing-12-Month Revenue$223.89 million
Management

CFO Edward Morgan (since 2009)

COO Stanley Riemann (since 2006)

Trailing-12-Month Operating Margin20.6%
Cash/Debt$229.8 million / $125 million
Dividend Yield6.5%
Competitors

Agrium (NYS: AGU)

CF Industries (NYS: CF)

PotashCorp (NYS: POT)

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 97% of the 254 members who have rated CVR believe the stock will outperform the S&P 500 going forward. These bulls include kenjotto and FoolishMikee.

This past summer, kenjotto touched on the tailwinds working in CVR's favor: "[T]he US will only need more and more fertilizer. With their significant cost advantages due to using pet coke and limited need for nat gas, their profit margins should be high for a long time to come."

Currently, CVR even sports a solid debt-to-equity of 26%. That's lower than that of rivals like Agrium (43%), CF Industries (30%), and PotashCorp (61%).

CAPS member FoolishMikee elaborates on the bull case:

As their primary raw material feedstock is pet coke and not nat. gas, they have a cost advantage as pet coke per ton of ammonia produced is lower than natural gas (page 9 of prospectus for more details) and aren't susceptible to natural gas price fluctuations.

Economies of scale related to the industry: plant located in key position to both cost cut and reap economies of scales of the industry, as well as having good logistics and having a cheaper transportation cost. ...

Management Tenure: I won't break down every executive officer individually but management has decades of experience in their respective positions of industry. ...

The main concern is the dividend, however, good management tenure, strong cost advantages make it a good company for the long term to flatten out the short term stock fluctuation. Thumbs up.

What do you think about CVR, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Interested in another easy way to trackCVR?Add it to your watchlist.

At the time this article was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. 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 Fool's disclosure policy always gets a perfect score.

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