Core Viewpoint - CF Industries Holdings, Inc. is highlighted as a potentially undervalued stock in the nitrogen fertilizer sector, with strong fundamentals and a competitive position in the market [1][12]. Business Overview - CF Industries operates nitrogen manufacturing complexes in the U.S. and the U.K., benefiting from scale, low-cost natural gas, and export access [2]. - The company generates substantial free cash flow across cycles, despite fluctuations in fertilizer demand driven by crop prices and natural gas costs [2]. Financial Metrics - CF's intrinsic value to price (IV/P) ratio is 1.10, indicating that its intrinsic value is approximately 10% higher than its current market price, suggesting undervaluation [5]. - Key financial metrics include a market cap of approximately US$ 12.75 billion, an enterprise value estimated between US$ 18 billion and US$ 19 billion, and a free cash flow of about US$ 1.71 billion [6]. Revenue & Profitability - For the trailing twelve months (TTM), CF reported revenue of US$ 6.73 billion, operating income of US$ 2.09 billion, and a net income of US$ 1.38 billion, reflecting a net margin of approximately 20% [7]. - The company maintains double-digit margins and strong earnings despite a downturn from the 2022 fertilizer boom [7]. Balance Sheet Strength - CF's balance sheet shows cash and equivalents of approximately US$ 1.84 billion, total debt of about US$ 3.40 billion, and shareholders' equity of around US$ 4.85 billion, indicating manageable leverage and ample liquidity [8]. - The cash generation supports debt servicing, dividends, and buybacks, essential for its capital-intensive operations [8]. Capital Returns - CF has a dividend yield of approximately 2.5% and has repurchased about US$ 1.4 billion in shares over the TTM, demonstrating a commitment to returning capital to shareholders [10]. - The aggressive buyback strategy is a key driver of intrinsic value growth [10]. Investment Thesis - CF is positioned as a durable, cash-generating business with a competitive cost structure and strong free cash flow, trading at a discount to its intrinsic value [12]. - The company is seen as undervalued due to market assumptions of declining future profitability, despite its ability to compound capital at attractive rates [11][12]. Industry Context - Global nitrogen demand is structurally linked to population growth and food needs, providing a steady market for CF's products [15]. - North American gas cost advantages create a competitive moat for CF against higher-cost international producers [15].

Market Overview - The current market environment is characterized by changing global supply, demand, and investor sentiment, with precious metals leading gains alongside industrial metals, as indicated by a 10% increase in the Bloomberg Commodity Index (BCOM) as of November 19, 2025 [2] - Four out of six BCOM sectors reported gains in Q3, while petroleum rose by 4%, with grains and energy sectors being exceptions [2] - China's major commodity imports eased in October, with iron ore showing resilience despite declines in crude oil, natural gas, and coal [3] - The World Bank's Commodity Markets Outlook predicts a 7% decline in global commodity prices in 2026 due to subdued economic activity, trade tensions, and excess oil supplies, while precious metals are expected to grow by 5% [4] LNG Supply Growth - Global LNG supply is projected to grow by 10.2% in 2026, driven by U.S. expansions, with capacity expected to rise to 130 million tons in 2026 from 90 million tons in 2024 [5] Investment Strategy - The list of the 12 best commodity stocks is curated based on hedge fund interest, utilizing data from Insider Monkey's hedge fund database, which tracks 983 stocks as of Q2 2025 [8] - Research indicates that imitating top stock picks of leading hedge funds can lead to market outperformance [9] Company Highlights Air Products and Chemicals, Inc. (NYSE:APD) - Air Products and Chemicals, Inc. is among the top commodity stocks, with 53 hedge fund holders [11] - The company reported Q4 FY25 EPS of $3.39, slightly above the forecast of $3.38, with a full-year EPS of $12.03, down 3% year-over-year [13] - Management highlighted a focus on cost-reset strategies, including a 16% workforce reduction, and stable operating margins at 23.7% [13] - The NEOM green hydrogen project is nearly 90% complete, with expectations for ammonia output in 2027 [14] EOG Resources, Inc. (NYSE:EOG) - EOG Resources, Inc. also has 53 hedge fund holders and maintained a price target of $145 with a "Buy" rating [16] - The company reported Q3 net income of $1.5 billion and free cash flow of $1.4 billion, with adjusted EPS of $2.71 [17] - EOG returned $1 billion to shareholders through dividends and repurchases, with regular dividend payments increasing by 8% year-over-year [18] - The company raised its free cash flow guidance to $4.5 billion, ending the quarter with $3.5 billion in cash [19] The Mosaic Company (NYSE:MOS) - The Mosaic Company has 54 hedge fund holders and received a "Buy" rating from Goldman Sachs, with a lowered price target from $37 to $33 [21][22] - The company reported Q3 net income of $411 million, up from $122 million year-over-year, and adjusted EBITDA of $806 million [23] - Mosaic aims to achieve $250 million in cost savings by 2026, having already recorded $150 million in reductions [25]

Financial Data and Key Metrics Changes - The company experienced a favorable pricing environment for lithium, with realized average prices increasing compared to the previous period [4][5] - The total capital expenditure (CAPEX) for 2025-2027 is estimated at $2.7 billion, reflecting a focus on increasing production capacity and maintaining low costs [7][44] Business Line Data and Key Metrics Changes - Lithium sales volumes reached the highest in SQM's history, supported by low costs and strong efficiencies at Atacama operations [5] - Iodine prices remained high, averaging close to $73 per kilogram, with a balanced supply-demand environment [6][7] - The specialty plant nutrition business showed sustainable growth in both volumes and revenues compared to the previous year [6] Market Data and Key Metrics Changes - Global lithium demand is expected to exceed 1.5 million metric tons in 2025, representing over 25% growth, driven by strong EV sales and energy storage systems [11][51] - China is projected to maintain a significant lead in EV markets with a 30% year-on-year growth, accounting for over 60% of global EV sales [11] Company Strategy and Development Direction - The company is focused on high-quality production, increasing volumes, and advancing cost reduction initiatives [4][5] - The construction of a seawater pipeline is over 80% complete, which will enhance iodine production capacity [6] - The company is expanding its iodine production capacity through a new operation in MarÃa Elena, adding 1,500 tons of iodine capacity [6][7] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the lithium market despite its volatility, expecting the positive pricing trend to continue [4] - The company anticipates robust commercial activity in the fourth quarter, with strong demand fundamentals for lithium [5] - Management highlighted the importance of maintaining a strong balance sheet and commitment to investment-grade ratings [29] Other Important Information - The joint venture with Codelco received approval from China's Antitrust Authority, with expectations to advance the partnership by the end of the year [8] - The company is evaluating the expansion of production capacity in China, with plans to increase lithium sulfate production [25] Q&A Session Summary Question: Insights on lithium demand, particularly in China - Management noted improved demand expectations for 2025, driven by strong EV sales and energy storage systems, with China leading in EV markets [11] Question: Production expectations for lithium in Chile and Australia - The company expects to produce close to 230,000 tons of lithium from Atacama, with an increase in spodumene concentrate sales projected [15][16] Question: Impact of Kwinana Hydroxide Conversion Plant on pricing - Management indicated that the international price for lithium is expected to rise closer to the Chilean price as the Kwinana plant ramps up production [18][19] Question: Update on the Codelco joint venture - The agreement with Codelco is expected to be finalized soon, with a dividend to be paid based on the tonnage belonging to Codelco [24][61] Question: Expectations for iodine market conditions - Management expects tight supply and demand conditions for iodine to persist, with prices likely to remain above $70 per kilogram [56]

Financial Data and Key Metrics Changes - The company experienced a favorable pricing environment for lithium, with realized average prices increasing compared to the previous period [4] - The total capital expenditure (CapEx) for 2025-2027 is estimated at $2.7 billion, reflecting a focus on increasing production capacity and maintaining low costs [7][44] Business Line Data and Key Metrics Changes - Lithium sales volumes reached the highest in SQM's history, supported by low costs and strong efficiencies at Atacama operations [5] - Iodine prices remained high, averaging close to $73 per kilogram, with revenues increasing by 5% year-on-year [6][7] - The specialty plant nutrition business showed sustainable growth in both volumes and revenues [7] Market Data and Key Metrics Changes - Global lithium demand is expected to exceed 1.5 million metric tons in 2025, representing over 25% growth, driven by strong EV sales and energy storage systems [11][51] - China is projected to maintain a significant lead in EV markets with a 30% year-on-year growth [11] Company Strategy and Development Direction - The company is focused on high-quality production, increasing volumes, and advancing cost reduction initiatives [5] - The construction of a seawater pipeline is over 80% complete, which will enhance iodine supply capabilities [6] - The company is expanding its iodine production capacity through a new operation in MarÃa Elena, adding 1,500 tons of iodine capacity [6] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the lithium market despite its volatility, expecting robust commercial activity in the fourth quarter [4][5] - The company anticipates strong demand fundamentals for electric vehicles and energy storage systems [5] Other Important Information - The joint venture with Codelco received approval from China's Antitrust Authority, with expectations to advance the partnership by year-end [8] - The company maintains a strong balance sheet and is committed to investment-grade ratings, indicating no immediate need for capital raises [29] Q&A Session Summary Question: Insights on lithium demand, particularly in China - Management noted improved demand expectations driven by stronger-than-expected EV sales, particularly in Europe and China [11] Question: Production expectations for lithium from Atacama and Mount Holland - Production in Chile is expected to be around 230,000 tons, with Mount Holland projected to produce between 23,000-24,000 tons [15][16] Question: Price differences between Chilean and international lithium - Management explained that price differences are due to conversion costs and refining expenses, which will be clarified in future reports [18][19] Question: Update on production capacity in China - The company expects to produce around 100,000 metric tons of lithium sulfate in China, with plans to expand capacity [25] Question: CapEx reduction implications - The CapEx reduction will not impact production capacity or projects, with a focus on maintaining ongoing initiatives [42][44] Question: Expectations for iodine market conditions - Demand for iodine is expected to grow by around 3% next year, with supply conditions remaining tight [56]

Core Insights - Verde AgriTech Ltd. has signed an exclusive agreement with UNDO Carbon Ltd. to explore a commercial partnership focused on creating and selling carbon removal credits from Enhanced Rock Weathering activities in Brazil, which could potentially remove hundreds of thousands of tonnes of CO₂ from the atmosphere [1][2] Partnership Overview - The collaboration aims to leverage Verde's mineral resources and operational capacity in Brazil alongside UNDO's expertise in Enhanced Rock Weathering measurement and technology, creating a scalable model for carbon removal [2][3] - This agreement marks Verde's entry into the carbon credit market, establishing a framework to monetize its Enhanced Rock Weathering activities [2][6] UNDO Carbon's Achievements - UNDO has spread over 313,800 tonnes of silicate rock across 398 farms, enriching 54,400 acres of agricultural land and set to permanently remove approximately 69,000 tonnes of CO₂ [4] - The company was recognized as one of the winners of the $100 million XPRIZE Carbon Removal competition, highlighting its innovative approach to carbon dioxide removal [3] Benefits of the Partnership - For Verde, the partnership provides access to UNDO's technology for measurement, reporting, and verification of carbon removal, as well as established relationships with carbon removal buyers [5][6] - For UNDO, the agreement secures a reliable source of high-quality Enhanced Rock Weathering feedstock from Verde's operations in Brazil [2][5] Warrant Grant Details - Verde will grant UNDO up to 1.7 million common share purchase warrants, with specific conditions regarding exercise price and vesting based on cash consideration received under Qualified Offtakes [7][9][10] - The warrants are structured to align equity participation with verified carbon credit revenue milestones, ensuring value alignment with Verde shareholders [18] Enhanced Rock Weathering Process - Enhanced Rock Weathering involves spreading crushed silicate rock on agricultural land to accelerate natural weathering processes, which can potentially remove up to 4 billion tonnes of CO₂ per year if scaled effectively [19]

Market Overview - December is historically a strong month for stock purchases due to holiday shopping and corporate budget utilization, with markets ending December higher 75% of the time since the 1950s [1] - The S&P 500 has risen 15% this year, driven by strong corporate earnings, although there are concerns about a potential downturn in 2026 [2] Presidential Cycle Impact - Historical data shows that Year 2 of a presidential term often results in lower stock returns, averaging only 3.3% compared to 9.7% in other years, with significant declines observed in the second year of both Trump and Biden administrations [4][5] Economic Conditions - U.S. economic growth is increasingly concentrated in a few AI firms, with 92% of GDP growth in the first half of 2025 attributed to AI-related investments, negatively impacting other sectors like real estate and healthcare [6] - Consumer confidence is at record lows, with a projected 11% decline in average holiday gift spending for 2025, particularly among Gen Z [7] Corporate Layoffs - Major corporations are initiating significant layoffs, reminiscent of 2022, with Amazon cutting 14,000 jobs and Verizon reducing its workforce by 15%, indicating a shift in market conditions [8] Investment Opportunities - Despite market volatility, certain stocks are attracting "smart money" buyers, with notable insider purchases indicating potential value [9] - Bloomin' Brands Inc. (BLMN) has seen significant insider buying, with shares trading below 6X forward earnings, suggesting a potential 100% rise in 2026 as markets favor low-priced value stocks [17][18][21] - Mosaic Co. (MOS) is positioned as a compelling value play in the fertilizer sector, with potash prices rising and a potential 40% upside if prices remain stable [22][25] Market Sentiment - Recent selloffs in major U.S. stock indexes highlight the fragility of high valuations, leading to panic selling among institutional investors while retail traders remain hopeful for recovery [27]

Investment Climate & Policy - A decade ago, a similar deal fell apart due to red tape, lack of guarantees, and alleged bribery attempts under President Robert Mugabe's administration [1][2] - The previous administration resisted cost-reflective tariffs and US dollar charges for coal, hindering investment in a 15 million tonnes capacity cement plant [2][3][4] - Aliko Dangote praised President Emmerson Mnangagwa's reforms and economic turnaround, leading to renewed investment in Zimbabwe [5][6] - Zimbabwe's efforts to attract investment have faced hurdles including transparency, corruption, hyperinflation, and currency instability [6][7] Industry & Sector Focus - Dangote previously considered investments in cement and coal in 2015, which did not materialize [1] - Dangote planned to build a 15 million tonnes capacity cement plant, which collapsed previously [4] - The current investment spans coal, cement, and fertilizer sectors [7] Potential Impact & Opportunities - If the deal is finalized, it could signal a return of investors to Zimbabwe [7] - The deal is considered a significant political win for President Emmerson Mnangagwa, who advocates for Zimbabwe's openness to investment [6] - Other investors, including the Chinese, are already active and performing well in these industries [4]

Third Quarter 2025 Performance - Consolidated Revenues reached $3452 million[6] - Net Income was $340 million[6] - Operating Earnings totaled $411 million[6] - Adjusted EBITDA was $806 million[6] Segment Results - **Phosphate:** Net Revenues were $1290 million, Adjusted EBITDA was $280 million, and Operating Earnings were $102 million[6] - **Potash:** Net Revenues were $695 million, Adjusted EBITDA was $329 million, and Operating Earnings were $229 million[6] - **Mosaic Fertilizantes:** Net Revenues were $1592 million, Adjusted EBITDA was $241 million, and Operating Earnings were $96 million[6] Phosphate Division - Phosphate division realized stripping margin in excess of $500 per tonne[9] - Phosphate division Q3 idle and turnaround expenses declined from $84 million in Q2 to $42 million[9] - Phosphate division trailing 3-month period ending October reached approximately 18 million tonnes[9] Potash Division - Potash division Q3 MOP cash cost of production declined by 4% from $74 to $71 per tonne[12] - Potash division Q3 idle and turnaround declined to $16M from $34M in the second quarter[12] Mosaic Fertilizantes Division - Mosaic Fertilizantes division Adjusted EBITDA of $241M, up 190% compared to the prior year[15] - Mosaic Fertilizantes division recovered $27M in Q3 against bad debt in prior quarter[15]

Financial Performance - In 2025, the company reported net sales of $164 million, net income of $43 million, and EBITDA of $71 million [1][6] - The Board of Directors declared a distribution of $4.02 per common unit, to be paid on November 17 to unitholders of record at the close of the market on November 10 [1] - The company experienced a 95% utilization rate of its consolidated ammonia plant, with combined ammonia production of 208,000 gross tons and UAN production of 337,000 tons [1][4] Sales and Pricing - Approximately 328,000 tons of UAN were sold at an average price of $348 per ton, and 48,000 tons of ammonia at an average price of $531 per ton [4] - UAN and ammonia prices increased by 52% and 33% respectively compared to the prior year, driven by tight inventory levels and elevated demand [4][5] Capital Expenditures and Cash Management - The company spent $13 million on capital projects in 2025, with total capital spending estimated to be between $58 to $65 million [6][7] - Total liquidity at the end of the quarter was $206 million, consisting of $156 million in cash and $50 million available under the ABL facility [7][8] Market Conditions and Outlook - Domestic and global inventories of nitrogen fertilizer remain tight, supporting higher prices [5][12] - The company anticipates ammonia utilization rates to be between 80% and 85% due to a planned turnaround at the Coffeyville facility [8][9] - The company expects direct operating expenses and turnaround impacts to be between $58 million and $63 million [9] Geopolitical and Environmental Factors - Geopolitical conflicts, particularly in Ukraine, continue to impact the nitrogen fertilizer industry [11][12] - Natural gas prices in Europe remain high, affecting ammonia production costs and creating export opportunities for U.S. producers [13][14] Future Projects and Developments - The company is working on a project to utilize natural gas and additional hydrogen from the adjacent Coffeyville refinery, which could increase ammonia production capacity by up to 8% [14][20] - Ongoing debottlenecking projects at both plants aim to improve reliability and production rates [15][16]

Financial Data and Key Metrics Changes - For Q3 2025, consolidated net income was $401 million, with earnings per share at $3.72 and EBITDA of $625 million, including a $488 million benefit from small refinery exemptions [4][10] - Adjusted EBITDA for the quarter was $180 million, with adjusted earnings per share at $0.40, reflecting a significant impact from RFS liability changes and inventory valuation [10][11] - The estimated accrued RFS obligation on the balance sheet was $93 million as of September 30, representing 90 million RINs marked to market at an average price of $1.03 [11] Business Line Data and Key Metrics Changes - In the petroleum segment, adjusted EBITDA was $120 million for Q3, driven by increased Group 3 benchmark cracks and higher throughput volumes [10][12] - The ammonia utilization rate in the fertilizer segment was 95%, down from 97% in Q3 2024, with higher nitrogen fertilizer prices compared to the previous year [8][13] - The renewable segment reported an adjusted EBITDA loss of $7 million, a decline from an $8 million profit in Q3 2024, primarily due to increased soybean oil prices and the loss of the blenders' tax credit [12][13] Market Data and Key Metrics Changes - Group 3 benchmark cracks averaged $25.97 per barrel in Q3 2025, up from $19.40 per barrel in the previous year [5][10] - Average RIN prices for Q3 were approximately $6.33 per barrel, nearly 25% of the Group 3 2-1-1 crack [5] - Fertilizer prices remained high due to tight global supplies, with ammonia priced at approximately $700 per ton and urea ammonium nitrate at $360 per ton [23] Company Strategy and Development Direction - The company plans to revert the renewable diesel unit back to hydrocarbon processing during the next scheduled turnaround in December, citing profitability concerns in the renewable space [21][22] - The management remains cautiously optimistic about the refining sector, anticipating stable demand and limited new refining capacity, which could support healthy crack spreads [19][20] - The company is focused on returning the balance sheet to targeted leverage and prioritizing paying down the term loan with excess cash flow [24][25] Management's Comments on Operating Environment and Future Outlook - Management noted that refining market conditions improved in Q3, with steady refined product demand and inventories near five-year averages [18] - The company expressed concerns about the renewable business's reliance on government support, which has been lacking, impacting profitability [21] - Future pipeline projects are expected to positively impact the Mid-Continent region, providing relief for product movement [28] Other Important Information - The company ended Q3 with a consolidated cash balance of $670 million and total liquidity of approximately $830 million [14][15] - Significant cash uses included $43 million for capital and turnaround spending and $20 million for term loan repayment [14] Q&A Session Summary Question: Pipeline projects and shipping commitments - Management acknowledged the potential positive impact of new pipeline projects for Mid-Continent refiners but has not yet decided on shipping commitments [27][28] Question: Renewable diesel plant utilization - The renewable diesel unit will be mothballed, with plans to find new uses for logistical assets, but the pretreatment plant will be shut down [29][30] Question: Renewable diesel conversion costs - The conversion back to hydrocarbon processing is primarily a catalyst change, with low costs associated with mothballing the unit [36][40] Question: RIN obligation strategy - The company plans to monitor RIN obligations closely and is preparing to purchase RINs to meet compliance deadlines [46][47] Question: Dividend restart timeline - Management indicated that predicting the right debt levels for restarting dividends is challenging, but the refining environment appears favorable for future growth [52][54]