8 Worst Small Cap Agriculture Stocks to Buy

6. CF Industries Holdings, Inc. (NYSE:CF) 

Number of Hedge Fund Holders: 45

% of Short Float: 5.35%

CF Industries Holdings, Inc. (NYSE:CF) is a prominent maker of hydrogen and nitrogen-based products for fertilizer, energy, and industrial applications in North America, Europe, and global markets. The company operates in several segments, producing ammonia, granular urea, and other nitrogen-based products for agricultural and industrial consumers.

Despite achieving a 100% ammonia utilization rate in the fourth quarter that ended December 31, 2024, CF Industries Holdings, Inc. (NYSE:CF) reported an adjusted EBITDA of $562 million, a 17.25% decrease from 2023. The company returned $1.9 billion to shareholders in dividends and buybacks, buying back 10% of its outstanding shares. However, growing capital expenses for the Blue Point ammonia project, as well as uncertainty surrounding long-term tax credits, have generated concerns about future financial allocation.

Furthermore, CF Industries Holdings, Inc. (NYSE:CF) is extending its carbon capture and sequestration programs, with key projects at its Donaldsonville complex scheduled to commence operations in 2025. The company also completed a feasibility assessment for a low-carbon ammonia plant in Blue Point, focusing on a final investment decision in Q1 2025. On the other hand, the project’s anticipated $4 billion cost, plus an extra $500 million for infrastructure, may limit returns unless ammonia prices continue to be above $450 per metric ton.

Additionally, regulatory concerns and natural gas price volatility are also possible risks. While the 45Q tax credits look to be solid, other incentives face policy uncertainties, and CF’s susceptibility to shifting gas prices may have an impact on profits. Despite increasing fertilizer demand and restricting global nitrogen supply, these financial and operational risks contributed to CF Industries’ over 16% year-to-date stock fall. This makes it one of the worst agriculture stocks.