Whenever I see a heavyweight like Blackstone purchase 45 million shares of a $2 company, I immediately seek to understand why.
What I discovered is infinitely telling.
Rentech is a manufacturer of nitrogen-based fertilizer products for crops like soybeans, potatoes, cotton, canola, alfalfa, corn and wheat.
As such, its earnings and cash flow are profoundly impacted by nitrogen fertilizer product prices.
Well, here’s why I believe that Blackstone just pushed its chips in…
Nitrogen fertilizer prices were incredibly soft in 2013, which put downward pressure on Rentech’s shares all year.
However, nitrogen fertilizer prices ($692 per ton), are dramatically rebounding, as this marks the 10th-consecutive week of higher prices.
More favorably still, an issue with congested railways, which has been negatively affecting fertilizer delivery, is beginning to resolve itself.
Burlington Northern Santa Fe Railroad (BNSF) just reported that it “improved the seven-day average velocity of [its] fertilizer unit trains by 17%.”
Even though the rail company fell short of its goal of having 52 trains loaded with fertilizer (it had only 20), the trend is toward improved delivery, which only adds to the appeal of Rentech’s stock.
On such merits, I strongly recommend following Blackstone into this stock.
Now, on Friday, we broke news of a cyber attack on Internet Explorer that was scary enough for the U.S. Department of Homeland Security to issue a notice for Americans to switch browsers.
The company that discovered the bug was FireEye, Inc. (FEYE).
Since FireEye is about to release earnings, I asked tech expert, Tom Anderson, if we should move in ahead of the big announcement.
I encourage you to read Tom’s analysis on FireEye immediately.
Onward and Updward,
Robert Williams, Founder