Terra Nitrogen Shares Dropped: What You Need to Know

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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 fertilizer company Terra Nitrogen (NYS: TNH) fell as much as 13% today on nearly three times the normal volume.

So what: News wires from Terra were quiet, but Seeking Alpha published an article suggesting selling Terra Nitrogen and buying competitor CVR Partners (NYS: UAN) . Could it just be coincidence that CVR is up today and Terra fell through the floor?

Now what: The author cites a call provision for Terra from CF Industries (NYS: CF) , the company's majority owner, as a major reason to sell. But the provision calls for a purchase price of an average of the previous 20 days, a nice premium after today's drop. I don't see a big reason to sell today, but being aware of such provisions is something investors should keep their eyes on.

Interested in more info on Terra Nitrogen? Add it to yourwatchlist.

At the time this article was published Fool contributor Travis Hoium has no position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings, or follow his CAPS picks at TMFFlushDraw.Try any of our Foolish newsletter services free for 30 days. We Fools don't 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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