Apple Inc. (AAPL), Dice Holdings, Inc. (DHX) & CF Industries Holdings, Inc. (CF): These 3 Stocks are ‘Magical’ Values

The cheapest way to play the AgSuperBull

By the numbers, CF Industries Holdings, Inc. (NYSE:CF) is among the best values ranked by this formula. With a P/E of just 6, and return on assets north of 18%, no one can call this stock expensive.

So why is CF Industries Holdings, Inc. (NYSE:CF)’s stock price stuck? It’s not for performance — in addition to having excellent return on assets, CF Industries Holdings, Inc. (NYSE:CF) recently beat on earnings and EPS has grown a whopping 34% over the past five years.

My theory is that the market keeps trying to time the highs and lows in this nitrogen and phosphate fertilizer firm. CF Industries Holdings, Inc. (NYSE:CF) is part of a major growth trend that I fondly call the “AgSuperBull.” Much like Deere & Company (NYSE:DE) and Potash Corp./Saskatchewan (NYSE:POT), it has long-term growth trends but its price is sometimes hampered by speculators.

The stock is (obviously) linked to commodities, so it’ll always fluctuate based on how commodity traders view the near-term outlook. But to me, if you’re a long-term investor, this creates great buying opportunities. It seems beyond obvious that as the world population grows beyond 7 billion and growing conditions become harsher, large agriculture and fertilizer stocks will do well. So why not buy a little of this name now for the long haul, and buy more every time the speculators decide to try to predict the weather.

You should bet on this agriculture bull — if you’re in it for the long haul it’s a no brainer.

It’s ok to like a value

Everyone likes a value, but finding them doesn’t have to be so hard. What I like best about Joel Greenblatt’s “magic formula” is that it provides outstanding returns without making the process cumbersome. It cuts straight to the two most important aspects of buying a stock: the stock’s value and (business) performance.

But what it doesn’t do is make a smart decision for you; you’ll have to do that. In other words, it makes sense to start with the magic formula to screen stocks, but ultimately you’ll have to make the call on which stocks to buy.

I like these stocks because not only are they cheap with great past performance, they have a bright outlook going forward. Wouldn’t you agree?

The article These 3 Stocks are ‘Magical’ Values originally appeared on Fool.com.

Adem is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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