
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 market, which exhibits considerable volatility largely influenced by weather conditions and seasonal fluctuations. Recent earnings reports have raised concerns, resulting in an 18% drop in share price and suggesting potential management credibility issues. The company’s operations extend into logistics for propane and other fuels across North America, but guidance has shifted from an optimistic 10% growth outlook in the U.S. to a more concerning negative 5%. Although the company has entered the compressed natural gas and renewable natural gas sectors with recent acquisitions, its historical earnings have been erratic, with a decade-long compounded shareholder return of just over 1% and a minimal 0.5% return over 20 years. While the business appears stable and generates consistent income, experts are cautious about its volatility and future growth prospects.
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)