Terra Industries Inc. (TRA) has been cashing in on the big boom in the agriculture market. Terra’s first-quarter result were unbeleivable, with net income jumping to over $100 million from just $5.9 million in the same period last year. Amazingly, this stock looks under valued at its current levels.

Terra Industries Inc. produces nitrogen and methanol products for agricultural and industrial markets both domestically and internationally. The company was founded in 1964, carries a market cap. of $4.37 billion and is headquartered in Sioux City, Iowa.

First-Quarter Results

Soaring global demand for agricutural goods has created a windfall of profits for many ag. producers. In an attempt to increase production capacities, many of these cash-heavy producers have turned to crop addatives like fertalizers to boost yields. This dynamic enabled Terra to report exceptional first-quarter results on Apr 24.

Revenue jumped to $574.7 million, up from $500.9 million in the same period last year. Net income totaled $100.2 million, up from just $5.9 million last year. This produced earnings of 97 cents per share, outpacing analyst estimates of 89 cents.

Cash Heavy and Buying Shares

Terra also announced that it had boosted its cash balance by $282 million to $817 million. The company also noted that since authorizing a share buyback program of 9.5 million, it has repurchased 6.7 million shares.

Estimates Are Up

As these fertilizer companies have been posting insane results, the analyst community has scrambled to keep pace with their estimates. The current-year estimate now stands at $4.59 per share, up from $4.08 90 days ago.

Valuations

Once again, this is a growth stock that has very attractive valuations, a very unique charecteristic. TRA’s forward P/E multiple stands at just a pinch over 10X.

The Chart

In spite of this company’s attractive valuations, its stock has traded mostly sideways in 2008. The last three times this stock has dipped lower, it has logged a higher low and rebounded. This is a bullish technical signal. The key level and next target for this stock is $52

Content Courtesy: Zacks Investment Research

#1 Ranked Stocks Highlight Archive
To truly take advantage of the Zacks Rank, you need to first understand how it works. That is why we created the free special report: Zacks Rank Guide: Harnessing the Power of Earnings Estimate Revisions.

| Blog Home| VitalStocks Home
View original at: VitalStocks Blog

No related posts.

Search Posts by Tag: TRA | Agricultural Chemicals | Basic Materials

RSS Feeds by Tag: TRA | Agricultural Chemicals | Basic Materials |

Other Posts by: Shawn | RSS Feed for this author