Cf Industries Holdings Stock Beneish M Score

CF Stock  USD 82.61  0.80  0.98%   
This module uses fundamental data of CF Industries to approximate the value of its Beneish M Score. CF Industries M Score tells investors if the company management is likely to be manipulating earnings. The score is calculated using eight financial indicators that are adjusted by a specific multiplier. Please note, the M Score is a probabilistic model and cannot detect companies that manipulate their earnings with 100% accuracy. Check out CF Industries Piotroski F Score and CF Industries Altman Z Score analysis.
  
At this time, CF Industries' Debt Equity Ratio is most likely to increase slightly in the upcoming years. The CF Industries' current Cash Flow To Debt Ratio is estimated to increase to 0.94, while Short and Long Term Debt Total is projected to decrease to roughly 2.9 B. At this time, CF Industries' Free Cash Flow Per Share is most likely to increase in the upcoming years. The CF Industries' current Price To Free Cash Flows Ratio is estimated to increase to 15.65, while Price Earnings Ratio is projected to decrease to 5.22.
At this time, it appears that CF Industries Holdings is an unlikely manipulator. The earnings manipulation may begin if CF Industries' top management creates an artificial sense of financial success, forcing the stock price to be traded at a high price-earnings multiple than it should be. In general, excessive earnings management by CF Industries executives may lead to removing some of the operating profits from subsequent periods to inflate earnings in the following periods. This way, the manipulation of CF Industries' earnings can lead to misrepresentations of actual financial condition, taking the otherwise loyal stakeholders on to the path of questionable ethical practices and plain fraud.
-3.54
Beneish M Score - Unlikely Manipulator
Elasticity of Receivables

0.8

Focus
Asset Quality

1.04

Focus
Expense Coverage

0.78

Focus
Gross Margin Strengs

0.56

Focus
Accruals Factor

0.78

Focus
Depreciation Resistance

0.97

Focus
Net Sales Growth

0.68

Focus
Financial Leverage Condition

1.96

Focus

CF Industries Beneish M-Score Indicator Trends

The cure to earnings manipulation is the transparency of financial reporting. It will typically remove the temptation of the top executives to inflate earnings (i.e., to promote the idea of 'winning at any cost'). Because a healthy internal audit department can enhance transparency, the board should promote the auditors' access to all the record-keeping systems across the enterprise. For example, if CF Industries' auditors report directly to the board (not management), the managers will be reluctant to manipulate simply due to the fear of punishment. On the other hand, the auditors will be free to investigate the ledgers properly because they know that the board has their back.
Current ValueLast YearChange From Last Year 10 Year Trend
Net Receivables274.3 M505 M
Way Down
Slightly volatile
Total Revenue4.5 B6.6 B
Way Down
Slightly volatile
Total Assets9.1 B14.4 B
Way Down
Slightly volatile
Total Current Assets1.8 BB
Way Down
Slightly volatile
Non Current Assets Total7.3 B11.3 B
Way Down
Slightly volatile
Property Plant Equipment5.1 B7.7 B
Way Down
Slightly volatile
Depreciation And Amortization594.9 M869 M
Way Down
Slightly volatile
Selling General Administrative153.6 M289 M
Way Down
Slightly volatile
Total Current Liabilities844.2 M800 M
Notably Up
Pretty Stable
Non Current Liabilities Total3.8 B5.2 B
Way Down
Slightly volatile
Short Term Debt72.2 M96 M
Way Down
Very volatile
Long Term Debt2.8 BB
Notably Down
Pretty Stable
Long Term Investments24.7 M26 M
Notably Down
Slightly volatile

CF Industries Holdings Beneish M-Score Driver Matrix

One of the toughest challenges investors face today is learning how to quickly synthesize historical financial statements and information provided by the company, SEC reporting, and various external parties in order to detect the potential manipulation of earnings. Understanding the correlation between CF Industries' different financial indicators related to revenue, expenses, operating profit, and net earnings helps investors identify and prioritize their investing strategies towards CF Industries in a much-optimized way. Analyzing correlations between earnings drivers directly associated with dollar figures is the most effective way to find CF Industries' degree of accounting gimmicks and manipulations.

About CF Industries Beneish M Score

M-Score is one of many grading techniques for value stocks. It was developed by Professor M. Daniel Beneish of the Kelley School of Business at Indiana University and published in 1999 under the paper titled The Detection of Earnings Manipulation. The Beneish score is a multi-factor model that utilizes financial identifiers to compile eight variables used to classify whether a company has manipulated its reported earnings. The variables are built from the officially filed financial statements to create a final score call 'M Score.' The score helps to identify companies that are likely to manipulate their profits if they show deteriorating gross margins, operating expenses, and leverage against growing revenue.

Current Deferred Revenue

181.57 Million

At this time, CF Industries' Current Deferred Revenue is most likely to increase significantly in the upcoming years.

CF Industries Earnings Manipulation Drivers

Although earnings manipulation is typically not the result of intentional misconduct by the c-level executives, it is still a widespread practice by the senior management of public companies such as CF Industries. It is usually done by a series of misrepresentations of various accounting rules and operating activities across multiple financial cycles. The best way to spot the manipulation is to examine the historical financial statement to find inconsistencies in earning reports to find trends in assets or liabilities that are not sustainable in the future.
201920202021202220232024 (projected)
Net Receivables242M265M497M582M505M274.3M
Total Revenue4.6B4.1B6.5B11.2B6.6B4.5B
Total Assets12.2B12.0B12.4B13.3B14.4B9.1B
Total Current Assets974M1.4B2.6B3.7B3.1B1.8B
Net Debt4.0B3.5B2.1B902M1.2B1.6B
Short Term Debt90M337M89M93M96M72.2M
Long Term Debt4.0B3.7B3.5B3.0B3.0B2.8B
Operating Income1.0B623M1.7B5.4B2.2B1.3B
Investments(319M)6M(1M)(440M)(403M)(423.2M)
Gross Profit Margin0.10.210.260.190.520.38

CF Industries ESG Sustainability

Some studies have found that companies with high sustainability scores are getting higher valuations than competitors with lower social-engagement activities. While most ESG disclosures are voluntary and do not directly affect the long term financial condition, CF Industries' sustainability indicators can be used to identify proper investment strategies using environmental, social, and governance scores that are crucial to CF Industries' managers, analysts, and investors.
Environment Score
Governance Score
Social Score

About CF Industries Fundamental Analysis

The Macroaxis Fundamental Analysis modules help investors analyze CF Industries Holdings's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of CF Industries using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of CF Industries Holdings based on its fundamental data. In general, a quantitative approach, as applied to this company, focuses on analyzing financial statements comparatively, whereas a qaualitative method uses data that is important to a company's growth but cannot be measured and presented in a numerical way.
Please read more on our fundamental analysis page.
CF Industries Holdings, Inc. manufactures and sells hydrogen and nitrogen products for energy, fertilizer, emissions abatement, and other industrial activities worldwide. The company was founded in 1946 and is headquartered in Deerfield, Illinois. Cf Industries operates under Agricultural Inputs classification in the United States and is traded on New York Stock Exchange. It employs 2970 people.

Pair Trading with CF Industries

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if CF Industries position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in CF Industries will appreciate offsetting losses from the drop in the long position's value.

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The ability to find closely correlated positions to CF Industries could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace CF Industries when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back CF Industries - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling CF Industries Holdings to buy it.
The correlation of CF Industries is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as CF Industries moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if CF Industries Holdings moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for CF Industries can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching
When determining whether CF Industries Holdings is a strong investment it is important to analyze CF Industries' competitive position within its industry, examining market share, product or service uniqueness, and competitive advantages. Beyond financials and market position, potential investors should also consider broader economic conditions, industry trends, and any regulatory or geopolitical factors that may impact CF Industries' future performance. For an informed investment choice regarding CF Industries Stock, refer to the following important reports:
Check out CF Industries Piotroski F Score and CF Industries Altman Z Score analysis.
Note that the CF Industries Holdings information on this page should be used as a complementary analysis to other CF Industries' statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.

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When running CF Industries' price analysis, check to measure CF Industries' market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy CF Industries is operating at the current time. Most of CF Industries' value examination focuses on studying past and present price action to predict the probability of CF Industries' future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move CF Industries' price. Additionally, you may evaluate how the addition of CF Industries to your portfolios can decrease your overall portfolio volatility.
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Is CF Industries' industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of CF Industries. If investors know CF Industries will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about CF Industries listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth
(0.67)
Dividend Share
1.6
Earnings Share
7.87
Revenue Per Share
34.304
Quarterly Revenue Growth
(0.40)
The market value of CF Industries Holdings is measured differently than its book value, which is the value of CF Industries that is recorded on the company's balance sheet. Investors also form their own opinion of CF Industries' value that differs from its market value or its book value, called intrinsic value, which is CF Industries' true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because CF Industries' market value can be influenced by many factors that don't directly affect CF Industries' underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between CF Industries' value and its price as these two are different measures arrived at by different means. Investors typically determine if CF Industries is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, CF Industries' price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.