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Wednesday, February 19, 2020 9:10:08 AM
As Baron Rothschild famously said, “The time to buy is when there’s blood in the streets.” Well, there is blood in the Street! But how do we know this isn’t a value trap or worse a future bankruptcy?
See also: Top Picks 2020: Brookfield Renewable Partners (BEP)
First, the company is conservatively managed and has one of the best balance sheets in the industry. It’s debt to EBITDA ratio is 1.2x with no debt due until 2025. Further, it has $121MM of cash.
Second, the company is run by an excellent and highly aligned management team. The management team previously founded B/E Aerospace and KLX Inc. B/E Aerospace was eventually sold to Rockwell Collins for 12.4x EBITDA.
KLX Inc. was eventually sold to Boeing (BA) for 14.3x EBITDA. Management decided to forgo a salary in exchange for restricted stock in KLXE. My guess is KLXE is eventually sold once energy industry conditions improve.
Third, KLXE just concluded its heavy capital expenditure phase and will generate significant free cash flow in 2020.
See also: Top Picks 2020: Insperity, Inc. (NSP)
Fourth, KLXE’s current unused share repurchase authorization of $49 million represents 33% of its current market cap. I expect to management to aggressively buy back stock.
Five, KLXE, trading at 3.6x EBITDA, is dirt cheap. This valuation is cheap on an absolute and relative basis. Note Apergy, a larger energy services competitor, recently announced that it has agreed to acquire Ecolab’s energy division for 12.5x EBITDA.
Sixth, there has been heavy insider buying. The CEO, CFO, controller, VP of operations, and several directors have all bought shares in the open market recently.
For those with a contrarian streak and the stomach for volatility, Buy KLXE for its multi-bagger potential. I expect it to trade several multiples higher in a couple years.
Recent KLXE News
- Form 8-K - Current report • Edgar (US Regulatory) • 05/23/2024 08:24:12 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 05/14/2024 09:07:09 PM
- Form 10-Q - Quarterly report [Sections 13 or 15(d)] • Edgar (US Regulatory) • 05/08/2024 08:46:05 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 05/07/2024 08:25:59 PM
- KLX ENERGY SERVICES HOLDINGS, INC. REPORTS FIRST QUARTER 2024 RESULTS • PR Newswire (US) • 05/07/2024 08:20:00 PM
- KLX ENERGY SERVICES ANNOUNCES 2024 FIRST QUARTER EARNINGS RELEASE AND CONFERENCE CALL SCHEDULE • PR Newswire (US) • 04/17/2024 08:15:00 PM
- KLX Energy Services Holdings, Inc. to Participate in the 2024 Piper Sandler 24th Annual Energy Conference • PR Newswire (US) • 03/15/2024 12:00:00 PM
- Form 10-K - Annual report [Section 13 and 15(d), not S-K Item 405] • Edgar (US Regulatory) • 03/08/2024 10:11:26 PM
- KLX ENERGY SERVICES HOLDINGS, INC. REPORTS FOURTH QUARTER 2023 RESULTS • PR Newswire (US) • 03/06/2024 09:20:00 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 03/06/2024 09:19:33 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 02/26/2024 11:05:29 AM
- KLX ENERGY SERVICES HOLDINGS, INC. PROVIDES PRELIMINARY 2023 FULL YEAR AND FOURTH QUARTER RESULTS • PR Newswire (US) • 02/26/2024 11:05:00 AM
- KLX ENERGY SERVICES HOLDINGS, INC. ANNOUNCES 2023 FULL YEAR AND FOURTH QUARTER EARNINGS RELEASE AND CONFERENCE CALL SCHEDULE • PR Newswire (US) • 02/26/2024 11:00:00 AM
- KLX Energy Services Holdings, Inc. to Participate in the 2024 J.P. Morgan Global High Yield & Leveraged Finance Conference • PR Newswire (US) • 02/23/2024 12:10:00 AM
- Form 8-K - Current report • Edgar (US Regulatory) • 12/06/2023 02:06:15 PM
- KLX Energy Services to Present at Sidoti Small Cap Conference on December 6th • PR Newswire (US) • 12/01/2023 01:00:00 PM
- Form 10-Q - Quarterly report [Sections 13 or 15(d)] • Edgar (US Regulatory) • 11/07/2023 09:04:00 PM
- KLX ENERGY SERVICES HOLDINGS, INC. REPORTS THIRD QUARTER 2023 RESULTS • PR Newswire (US) • 11/06/2023 09:15:00 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 11/06/2023 09:06:44 PM
- KLX ENERGY SERVICES ANNOUNCES 2023 THIRD QUARTER EARNINGS RELEASE AND CONFERENCE CALL SCHEDULE • PR Newswire (US) • 10/17/2023 08:15:00 PM
- KLX Energy Services to Participate in the H.C. Wainwright 25th Annual Global Investment Conference • PR Newswire (US) • 09/07/2023 08:15:00 PM
- KLX Energy Services to Participate in the 2023 Barclays CEO Energy-Power Conference • PR Newswire (US) • 08/31/2023 08:15:00 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 08/16/2023 11:44:11 AM
- KLX Energy Services to Present at Sidoti Virtual Investor Conference on August 16th • PR Newswire (US) • 08/14/2023 08:15:00 PM
- Form 10-Q - Quarterly report [Sections 13 or 15(d)] • Edgar (US Regulatory) • 08/10/2023 08:12:22 PM
FEATURED Fifty 1 Labs, Inc. Announces Major Strategic Advancements and Shareholder Updates • Jun 14, 2024 2:07 AM
ECGI Holdings Announces LOI to Acquire Pacific Saddlery to Capitalize on $12.72 Billion Market Potential • ECGI • Jun 13, 2024 9:50 AM
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