Long
GLOP - Beat down company | Will it be Oil's New Roaring Tiger?
Disclaimer: I'm not a financial advisor. Before committing into an investment based on my positions, do your OWN due diligence. It is not intended as legal, financial or investment advice and should not be construed or relied on as such. Before making any commitment of a legal or financial nature you should seek advice from a qualified and registered legal practitioner or financial or investment adviser.
Now we got that out of the way..
Time for the technicals!
So what does the chart tell us?
When looking for zones where price could re-test and then rebound, one of the key elements or patterns that always recur in the market is that past zones where a security or asset has ranged is more than likely to become a very strong support zone.
I use the term support zone instead of support level as accumulation/distribution zones are more likely to be atleast 2-5% wide depending on how wide the ranging zone was.
By looking at our MACD, it is likely that at some point in the future that it would go more parabolic (Based on the histogram) which we could use in tandem with the accumulation zone.
Not only are we seeing price touch a support zone and also MACD going parabolic (AKA a confluence area), to add more conviction, the price is currently touching the 200 EMA!
This is key, whenever a security or an equity hit a 200 EMA, it's most likely that it will bounce up for as long as the timeframe trend is bullish.
We can see that
GLOP's price is touching the 200 EMA, but will it hold on? Prior to what I said regarding long term trends pulling back to the 200 EMA to resume the trend, then yes!
Why?
Because once you zoom out, leaving out pre-covid prices, using the volume profile, it's safe to assume that it was a successful breakout with a retest becoming imminent.
There has been a year long symmetrical triangle forming and as soon as it went above the 200 EMA, it broke through a year's worth of resistance on the trend line.
Ignoring technicals for now, what can we see aboutGLOP's fundamentals?
Gas Log Partnets Ltd, as of right now, has financial statements to that of a growth stock and a price of a beaten down company.
The question lies, is the company fairly traded at the current price and what's the reason for such a huge draw down on the stock price on COVID?
Firstly, GLOP, in my own Due Diligence, is NOT fairly traded at the current price and I see it as a huge value play.
Why?
Looking at Gas Log's financial statements, it's on the same level as Revenue growth on Exxon, Energy Transfer, and CVX (Except for the past 2 years for which it compensates on "paster" years which yielded an average of 20%-40% revenue growth).
So it's growth is, as obvious, similar to that of a growth stock!
So does that mean it's not generating operating and free cash flow and margins are in the dumpster?
No!
Actually, looking back at it again, average operating margin is 51%! That's insane for an oil mid stream company!
Even with lower revenue growth for the past 2 years, it has been able to generate free cash flow of around 127mln in 2018 to $226 mln in 2019.
What about FCF in 2020? It's also maintained 127mln free cash flow, which is great!
Operating cash flow has been consistently in line with operating profit and for the past 3 years, CapEx has been shrinking to the near 0s!
With my spreadsheet, we can compare per share items to the current stock price
(Disclaimer: I found these digits myself using QuickFS, use these under the discretion that it could be mistaken)
2014 2015 2016 2017 2018 2019 2020
sale/sh $8.76 $8.89 $9.61 $8.74 $8.91 $8.24 $6.68
book/sh $26.38 $26.54 $27.88 $24.48 $29.14 $21.00 $19.08
fcf/sh -$35.95 -$12.06 -$19.65 -$0.03 $2.95 $4.92 2.54
debt/sh $37.95 $35.50 $47.39 $33.52 $31.74 $29.26 $25.72
ebit/sh $4.76 $4.46 $5.06 $4.74 $4.53 $4.04 $2.92
ebitda/sh $6.67 $6.46 $7.18 $6.63 $6.58 $5.98 $4.58
earnings//sh $0.75 $2.38 $2.17 $2.09 $1.76 -$1.43 $1.14
share price $25.24 $14.22 $20.55 $24.75 $19.80 $15.64 $4.17
out shares 21.00 28.00 33.00 46.00 43.00 46.00 50.00
We can see a free cash flow yield of nearly 50% in just the current year and if we are to look at Dividends per share:
2014 2015 2016 2017 2018 2019 2020
Div per share $0.58 $1.78 $1.91 $2.02 $2.11 $2.20 $0.82
If we buyGLOP at the current price, we could be seeing, once the company has recovered, a WHOPPING 50% dividend yield approx.
Not only that, but book value is currently $19! Which is crazy how undervalued the company is!
Now, we shouldn't say that this asset base is totally risk-free, there still lies the risk of bankruptcy.
But looking at the balance sheet, it has been impressive how the company has managed itself!
Maintaining 110mln cash equivalents in the bank having the ability to pay all of it's short-term debt and be able to manage short-term liabilities such as receivables, deferred revenue, etc. etc.
Normally, for small microcap companies, companies CANNOT afford to maintain a positive shareholder equity during a recession.
But look at GLOP? it maintained 963mln in shareholder's equity.
To add more conviction, even BlackRock bought it's parent company for $5 per share!
And, like my last post, I will be posting here the approximated value of the company with average and median being the final "value"
2021
fair val. ev/ebitda $12.95
fair val. ev/ebit $8.86
fair val. ev/s $10.16
fair val. p/e $14.18
fair val. p/s $13.78
average $11.99
median $12.95
That's all for me today, remember the disclaimer! This is just my own due diligence and I'm just sharing it with all of you out there.
Let me know your thoughts in the comments.
Disclaimer:
The information on this website is for general information purposes only. It is not intended as legal, financial or investment advice and should not be construed or relied on as such. Before making any commitment of a legal or financial nature you should seek advice from a qualified and registered legal practitioner or financial or investment adviser.
Now we got that out of the way..
Time for the technicals!
So what does the chart tell us?
When looking for zones where price could re-test and then rebound, one of the key elements or patterns that always recur in the market is that past zones where a security or asset has ranged is more than likely to become a very strong support zone.
I use the term support zone instead of support level as accumulation/distribution zones are more likely to be atleast 2-5% wide depending on how wide the ranging zone was.
By looking at our MACD, it is likely that at some point in the future that it would go more parabolic (Based on the histogram) which we could use in tandem with the accumulation zone.
Not only are we seeing price touch a support zone and also MACD going parabolic (AKA a confluence area), to add more conviction, the price is currently touching the 200 EMA!
This is key, whenever a security or an equity hit a 200 EMA, it's most likely that it will bounce up for as long as the timeframe trend is bullish.
We can see that
GLOP's price is touching the 200 EMA, but will it hold on? Prior to what I said regarding long term trends pulling back to the 200 EMA to resume the trend, then yes!Why?
Because once you zoom out, leaving out pre-covid prices, using the volume profile, it's safe to assume that it was a successful breakout with a retest becoming imminent.
There has been a year long symmetrical triangle forming and as soon as it went above the 200 EMA, it broke through a year's worth of resistance on the trend line.
Ignoring technicals for now, what can we see about
GLOP's fundamentals?Gas Log Partnets Ltd, as of right now, has financial statements to that of a growth stock and a price of a beaten down company.
The question lies, is the company fairly traded at the current price and what's the reason for such a huge draw down on the stock price on COVID?
Firstly, GLOP, in my own Due Diligence, is NOT fairly traded at the current price and I see it as a huge value play.
Why?
Looking at Gas Log's financial statements, it's on the same level as Revenue growth on Exxon, Energy Transfer, and CVX (Except for the past 2 years for which it compensates on "paster" years which yielded an average of 20%-40% revenue growth).
So it's growth is, as obvious, similar to that of a growth stock!
So does that mean it's not generating operating and free cash flow and margins are in the dumpster?
No!
Actually, looking back at it again, average operating margin is 51%! That's insane for an oil mid stream company!
Even with lower revenue growth for the past 2 years, it has been able to generate free cash flow of around 127mln in 2018 to $226 mln in 2019.
What about FCF in 2020? It's also maintained 127mln free cash flow, which is great!
Operating cash flow has been consistently in line with operating profit and for the past 3 years, CapEx has been shrinking to the near 0s!
With my spreadsheet, we can compare per share items to the current stock price
(Disclaimer: I found these digits myself using QuickFS, use these under the discretion that it could be mistaken)
2014 2015 2016 2017 2018 2019 2020
sale/sh $8.76 $8.89 $9.61 $8.74 $8.91 $8.24 $6.68
book/sh $26.38 $26.54 $27.88 $24.48 $29.14 $21.00 $19.08
fcf/sh -$35.95 -$12.06 -$19.65 -$0.03 $2.95 $4.92 2.54
debt/sh $37.95 $35.50 $47.39 $33.52 $31.74 $29.26 $25.72
ebit/sh $4.76 $4.46 $5.06 $4.74 $4.53 $4.04 $2.92
ebitda/sh $6.67 $6.46 $7.18 $6.63 $6.58 $5.98 $4.58
earnings//sh $0.75 $2.38 $2.17 $2.09 $1.76 -$1.43 $1.14
share price $25.24 $14.22 $20.55 $24.75 $19.80 $15.64 $4.17
out shares 21.00 28.00 33.00 46.00 43.00 46.00 50.00
We can see a free cash flow yield of nearly 50% in just the current year and if we are to look at Dividends per share:
2014 2015 2016 2017 2018 2019 2020
Div per share $0.58 $1.78 $1.91 $2.02 $2.11 $2.20 $0.82
If we buy
GLOP at the current price, we could be seeing, once the company has recovered, a WHOPPING 50% dividend yield approx.Not only that, but book value is currently $19! Which is crazy how undervalued the company is!
Now, we shouldn't say that this asset base is totally risk-free, there still lies the risk of bankruptcy.
But looking at the balance sheet, it has been impressive how the company has managed itself!
Maintaining 110mln cash equivalents in the bank having the ability to pay all of it's short-term debt and be able to manage short-term liabilities such as receivables, deferred revenue, etc. etc.
Normally, for small microcap companies, companies CANNOT afford to maintain a positive shareholder equity during a recession.
But look at GLOP? it maintained 963mln in shareholder's equity.
To add more conviction, even BlackRock bought it's parent company for $5 per share!
And, like my last post, I will be posting here the approximated value of the company with average and median being the final "value"
2021
fair val. ev/ebitda $12.95
fair val. ev/ebit $8.86
fair val. ev/s $10.16
fair val. p/e $14.18
fair val. p/s $13.78
average $11.99
median $12.95
That's all for me today, remember the disclaimer! This is just my own due diligence and I'm just sharing it with all of you out there.
Let me know your thoughts in the comments.
Disclaimer:
The information on this website is for general information purposes only. It is not intended as legal, financial or investment advice and should not be construed or relied on as such. Before making any commitment of a legal or financial nature you should seek advice from a qualified and registered legal practitioner or financial or investment adviser.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.