Tidewater Midstream

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Hi, since you have added PKI, with a BC refinery, what do you think of TWM? Also has a small refinery, up by Prince George, the only other one in BC probably. Thanks!

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Asked on May 30, 2021 4:38 pm
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It's up 20% since I bought TWM a few months ago, vs I'm -3% in PKI, short term fluctuations perhaps, and PKI has articulated a growth concept, thanks for your overall take.

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Posted by David Mogensen
Answered on May 31, 2021 12:12 pm
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Hi there,

Not a bad company, but while PKI does have a 'midstream' segment, it also has a large retail segment which is the basis for its rebound potential.

In terms of TWM - not a bad company, but also one that hasn't exactly done much. It began trading in 2015 and has been in a slow downtrend every since. This is a small cap company that has plenty of competition on the TSX Index for investors money.

It has very strong revenue growth but at the same time, profitability has been eroding. The company is trading at an expensive 40 times earnings, but that drops to a cheap 9 times earnings next year.

Over all, i think the company has decent double-digit upside from here over the next year. However, as a small cap it carries additional risk and based on past performance, its not really one that I'd view as an attractive risk-to-reward proposition. I mean it does look cheap here, but once again - despite strong growth it has done pretty much nothing since 2015.

Since it listed, - TWM is down by 15% while PKI is up by 70% over that same period. Even if we compared pre-COVID highs - PKI was sitting on triple-digit returns, while TDW was down by 13% at the end of 2020 (since 2015).

Mat

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Posted by Mathieu Litalien
Answered on May 31, 2021 5:11 am