In short: "I'm greedy" — fertilizer maker whose intermediate product, ammonia, makes it an energy-transition play with three new demand legs: marine fuel, coal co-firing in Asia, and a hydrogen carrier. Made with cheap US natural gas ($2-3 vs $9 in Europe/Asia) but priced off the high-cost foreign producer → huge, sustainable margin. "Lots of ways to win, and an entry point of low valuation too."
LSB Industries makes fertilizer, and to do that it makes ammonia. Robotti is "greedy" about it because ammonia is about to get three brand-new sources of demand in the shift away from carbon: as a ship fuel (burning ammonia gives off no CO2), as something Asian power plants can burn alongside coal, and as a way to carry hydrogen (hydrogen is very hard to ship, but you can ship ammonia and convert it).
On top of that, it has a built-in cost edge: LSB makes ammonia with cheap U.S. natural gas (around $2-3 versus $9 in Europe or Asia), but the selling price is set by those expensive foreign producers — so the American maker pockets a large, durable profit margin. Cheap valuation plus several ways to win.
1:32:41therefore have growth and therefore good economics and start out with low valuations too. So part of what you've been doing, as we mentioned very briefly before, is investing in these chemical products companies like LSB Industries that are in ammonia and the like — these companies that in some way embody the competitive advantage of old-style US industrial businesses. Is that fair to say? Well, it is, but I'm looking for more, I'm
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