UAN

Billionaire Carl Icahn Accumulates $12M in CVR Partners ($UAN) Over Five Months - 9.7% Dividend Yield Faces Revenue Decline Challenges

04/07/2025 22:53

Billionaire investor Carl Icahn has been consistently accumulating shares of CVR Partners LP ($UAN) over the past five months. From November 2024 through April 2025, Icahn purchased more than 160,000 shares worth approximately $12 million, demonstrating a sustained interest in the nitrogen fertilizer producer. Shares of small-cap $UAN have shown significant volatility over the past six months. The stock jumped from the $62 range in late October 2024 to around $80 by late November, then reached as high as $82 in mid-January 2025 before recently declining to the $67 range in early April. Icahn's purchases have come in three primary waves. The first and largest came in November 2024, when he acquired approximately 140,000 shares worth about $10 million. This was followed by approximately 30,000 shares in December, and another 30,000+ shares from March through early April 2025. Notably, transactions after March 27, 2025, were executed pursuant to a Rule 10b5-1 trading plan adopted on December 20, 2024, suggesting a planned, long-term approach to his accumulation strategy. CVR Partners LP, headquartered in Sugar Land, Texas, specializes in producing nitrogen fertilizer products, primarily urea ammonium nitrate (UAN) and ammonia for agricultural and industrial customers. A subsidiary of CVR Energy, the company has a market capitalization of approximately $735 million. Financially, $UAN stands out for its high dividend yield, currently at 9.72% (or $6.76 per share), which significantly exceeds market averages and potentially appeals to income-oriented investors. However, the company's revenue has been declining, from $835.58 million in 2022 to $525.32 million in 2024, raising questions about long-term sustainability. From a valuation perspective, $UAN trades at a price-to-earnings (P/E) ratio of 12.08, slightly below the sector average of 14.2, while its price-to-book (P/B) ratio of 2.42 is substantially higher than the sector average of 0.9. The company also carries a relatively high debt-to-equity ratio of 1.94. The nitrogen fertilizer market is subject to various factors including agricultural commodity prices, energy costs, and global supply chain issues. Recent volatility in international grain prices and uncertainty in energy costs have impacted the fertilizer industry broadly, yet Icahn's continued purchases may signal long-term optimism in this sector. Importantly, Icahn holds these shares indirectly through various subsidiaries (e.g., CVR Services, LLC, UAN Services, LLC), and disclaims beneficial ownership except to the extent of his pecuniary interest in SEC filings—a common approach in his complex ownership structures. Consistent buying by a well-known activist investor like Icahn typically signals confidence in a company's value. However, investors should also consider potential risk factors including the cyclical nature of the fertilizer industry, $UAN's declining revenue trend, and its elevated debt levels. Catalysts to watch going forward include upcoming quarterly earnings reports, movements in agricultural commodity prices, and trends in energy costs. Investors should also monitor any signals of additional stake increases by Icahn and potential strategic changes that might follow.

You can receive notifications when news is published.