
TSE:SPB
This summary was created by AI, based on 5 opinions in the last 12 months.
Superior Plus Corp (SPB-T) operates primarily in the propane and fuel logistics sector, facing challenges such as market volatility and seasonal margin pressure. Recent earnings reports have disappointed, leading to a significant drop in share prices and concerns over management credibility. While the acquisition of a compressed natural gas business indicates a strategic shift towards alternative energy sources, erratic earnings patterns raise questions about its long-term sustainability. The stock has shown a compounded growth of slightly over 1% in the last decade, sparking debate among experts regarding its future potential. With a distribution yield of around 2.5%, it presents itself as a stable, yet arguably stagnant, investment option that trades income for capital appreciation.
Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. The revenues were ahead of estimates by 14%. EPS was 40 cents, beating the estimated 33 cents. Q4 showed some income declines however. The acquisition plan backed by Brookfield has not changed. The dip is a buying opportunity. Unlock Premium - Try 5i Free
The company has good businesses. Their problem was the balance sheet. They will be 3 times debt-to-EBITDA. They have more funds for M&A, which could help them make some interesting acquisitions. He likes the distribution and the management team. They just partnered with Brookfield, which gives a strong vote of confidence. Its valuation is reasonable. Not the first place he would put capital, but you would do well if you already own it.
Recently reported earnings for SPB set a first quarter record as the Certarus acquisition is accretive to earnings. The company increased earnings guidance for the year. Net cash flow per share was up 250%. It trades at 16x earnings and under 2x book value and pays a great yield. We recommend a stop-loss at $9, looking to achieve $13 -- upside potential of 23%. Yield 7.0%
(Analysts’ price target is $13.10)