Is CF Industries Holdings an Incredible Value Stock? 3 Reasons Why CF Will Be Tough to Beat – Tale of the Tape

This method discovered several great candidates for value-oriented investors, but today let’s focus on CF Industries Holdings, Inc. (CF) as this stock is looking especially impressive right now. And while there are numerous reasons why this is the case, we have highlighted three of the most vital reasons for CF’s status as a solid value stock below:

Forward PE for CF Industries Holdings

Easily one of the most popular readings for value investors, the forward PE ratio shows us the current price of a stock divided by the full year earnings. Generally speaking, value investors like to see this ratio below 20, though it can vary by industry.

Right now, CF has a forward PE of just 13.02, which means that investors are paying $13.02 for each dollar in expected CF Industries Holdings earnings this year. Compared to the industry at large this is pretty favorable as the overall space has an average PE of 13.62 in comparison.

PEG Ratio for CF

While earnings are definitely important, it is vital to know how much you are paying for the growth of earnings as well. One can easily do that with the PEG ratio as this metric looks to show investors how much they are paying for each unit of earnings growth.

CF manages to impress on this front as well, as the company’s PEG is just 1.34, suggesting that CF Industries Holdings is trading as a relative bargain right now. This is particularly the case when you compare this PEG to the industry, as the broader segment has an average PEG of 1.51 in comparison.

CF Earnings Estimate Revisions Moving in the Right Direction

The solid value ratios outlined in the preceding paragraphs might be enough for some investors, but we should also note that the earnings estimate revisions have been trending in a positive direction as well. Analysts who follow CF stock have been raising their estimates for the company lately, meaning that the EPS picture is looking a bit more favorably for CF Industries Holdings now.

Over the past 60 days 9 earnings estimate have gone higher compared to 1 lower for the full year. These revisions have helped to boost the consensus estimate as 60 days ago CF was expected to post earnings of $20.75 per share for the full year though today it looks to have EPS of $21.87 for the full year.

Bottom Line

For the reasons detailed above, investors shouldn’t be surprised to read that we have CF as a stock with a Value Score of ‘B’ and a Zacks Rank #2 (Buy). So if you are a value investor, definitely keep CF on your short list as this looks be a stock that is very well-positioned for gains in the near term.

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