NYSE:CF is probably undervalued for the fundamentals it is displaying.

Uncover the potential of CF INDUSTRIES HOLDINGS INC (NYSE:CF) as our stock screener's choice for an undervalued stock. NYSE:CF maintains a strong financial position and offers an appealing valuation. We'll delve into the specifics below.

ChartMill's Evaluation of Valuation

To assess a stock's valuation, ChartMill utilizes a Valuation Rating on a scale of 0 to 10. This comprehensive assessment considers various valuation aspects, comparing price to earnings and cash flows, while factoring in profitability and growth. NYSE:CF has achieved a 7 out of 10:

• The Price/Earnings ratio is 9.70, which indicates a very decent valuation of CF.
• Compared to the rest of the industry, the Price/Earnings ratio of CF indicates a rather cheap valuation: CF is cheaper than 86.90% of the companies listed in the same industry.
• CF's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.02.
• Based on the Price/Forward Earnings ratio, CF is valued a bit cheaper than the industry average as 78.57% of the companies are valued more expensively.
• The average S&P500 Price/Forward Earnings ratio is at 21.32. CF is valued slightly cheaper when compared to this.
• Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of CF indicates a rather cheap valuation: CF is cheaper than 90.48% of the companies listed in the same industry.
• Compared to the rest of the industry, the Price/Free Cash Flow ratio of CF indicates a rather cheap valuation: CF is cheaper than 92.86% of the companies listed in the same industry.
• The excellent profitability rating of CF may justify a higher PE ratio.

How do we evaluate the Profitability for NYSE:CF?

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NYSE:CF scores a 9 out of 10:

• CF has a Return On Assets of 10.61%. This is amongst the best in the industry. CF outperforms 89.29% of its industry peers.
• CF has a better Return On Equity (26.67%) than 91.67% of its industry peers.
• Looking at the Return On Invested Capital, with a value of 13.40%, CF belongs to the top of the industry, outperforming 91.67% of the companies in the same industry.
• The Average Return On Invested Capital over the past 3 years for CF is significantly above the industry average of 7.50%.
• The last Return On Invested Capital (13.40%) for CF is well below the 3 year average (21.67%), which needs to be investigated, but indicates that CF had better years and this may not be a problem.
• The Profit Margin of CF (23.00%) is better than 95.24% of its industry peers.
• CF's Profit Margin has improved in the last couple of years.
• With an excellent Operating Margin value of 34.49%, CF belongs to the best of the industry, outperforming 94.05% of the companies in the same industry.
• In the last couple of years the Operating Margin of CF has grown nicely.
• CF has a Gross Margin of 38.38%. This is in the better half of the industry: CF outperforms 78.57% of its industry peers.
• In the last couple of years the Gross Margin of CF has grown nicely.

Analyzing Health Metrics

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. NYSE:CF has earned a 9 out of 10:

• CF's Altman-Z score of 2.67 is fine compared to the rest of the industry. CF outperforms 71.43% of its industry peers.
• The Debt to FCF ratio of CF is 1.31, which is an excellent value as it means it would take CF, only 1.31 years of fcf income to pay off all of its debts.
• CF has a better Debt to FCF ratio (1.31) than 90.48% of its industry peers.
• Although CF does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
• A Current Ratio of 3.81 indicates that CF has no problem at all paying its short term obligations.
• Looking at the Current ratio, with a value of 3.81, CF belongs to the top of the industry, outperforming 88.10% of the companies in the same industry.
• CF has a Quick Ratio of 3.44. This indicates that CF is financially healthy and has no problem in meeting its short term obligations.
• CF has a Quick ratio of 3.44. This is amongst the best in the industry. CF outperforms 89.29% of its industry peers.

Evaluating Growth: NYSE:CF

A key component of ChartMill's stock assessment is the Growth Rating, which spans from 0 to 10. This rating evaluates diverse growth factors, such as EPS and revenue growth, considering both past performance and future projections. NYSE:CF has received a 4 out of 10:

• The Earnings Per Share has been growing by 47.09% on average over the past years. This is a very strong growth
• The Revenue has been growing by 8.41% on average over the past years. This is quite good.

Our Decent Value screener lists more Decent Value stocks and is updated daily.

Check the latest full fundamental report of CF for a complete fundamental analysis.

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.