Middle Coast Investing Holds CF Stock Despite Opposing Hormuz Disruption

Middle Coast Investing disclosed its second-quarter 2026 investor letter, highlighting CF Industries Holdings, Inc. (NYSE:CF) as a strategic holding. The firm stated it is explicitly rooting against the stock because the conditions that would lower CF Industries Holdings, Inc. (NYSE:CF) share prices would generally benefit the broader portfolio. Middle Coast Investing identified the Strait of Hormuz blockage as the primary catalyst, noting it has bottlenecked a significant portion of the global nitrogen supply.

CF Industries Holdings, Inc. (NYSE:CF) operates as a leading manufacturer and distributor of fertilizers, with a specific focus on nitrogen-based fertilizer and ammonia production. The firm’s letter explains that the company’s competitive position is reinforced by its access to cheap natural gas. Middle Coast Investing noted that CF Industries Holdings, Inc. (NYSE:CF) is generating substantial cash flow to fund a pending expansion project. At the price paid by the fund, which was approximately $120 per share, the stock traded at about 7 times the company’s target mid-cycle EBITDA.

The investment decision was framed as insurance against continued disruptions in the Strait of Hormuz. The advisor stated that while it aimed to build a starter position at an average price around $110 per share, it determined the insurance value for the portfolio justified paying for the position immediately. This strategy aligns with a cautious approach focused on resilient and well-capitalized businesses, a theme emphasized in the firm’s Q3 2026 review.

Market context for the quarter indicated mixed performance across portfolios. Middle Coast Investing reported that its U.S., Core U.S., and European portfolios returned -2.4%, -3.9%, and -5.0%, respectively, during the period. Despite these headwinds, underlying U.S. portfolio holdings demonstrated solid fundamentals, with median revenue growth of 7.2% and earnings growth of 16.4%. The firm observed that market resilience was linked to AI spending amid higher rates, while inflation continued to pressure consumers.

As of October 14, 2026, CF Industries Holdings, Inc. (NYSE:CF) closed at $119.46 with a market capitalization of $18.08 billion. The stock was up 55.10% year-to-date and traded within a 52-week range of $75.42 to $141.96. According to database records, 44 hedge fund portfolios held CF Industries Holdings, Inc. (NYSE:CF) at the end of the second quarter, a decrease from 49 in the previous quarter.

The advisor’s broader Q3 2026 review highlighted key themes including AI, inflation, and the U.S.-Iran conflict. The firm noted that while the conflict was temporary, it affected energy security. Market breadth data showed S&P 500 stocks averaging a 9.7% return, with only 40.55% of stocks trading above their 200-day moving average.