Enerflex Ltd (EFX-T)

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. The merger is highly accretive to EBITDA and cash flow. The merger does make sense. It will lower cost of capital over time. They would essentially double their size. The deal is overall positive. It is normal to see some pressure with all-stock deals due to concerns about dilution. Unlock Premium - Try 5i Free

(A Top Pick Nov 27/14. Down 14.04%.) Does a lot of natural gas projects globally. Made a large acquisition to diversify into Latin America. It looks like it is going to be a good, long term investment. However, there was a sharp drop off of CapX globally and this company’s backlog came off sharply in the quarter. He trimmed his position a little.

Earnings came out today and it is up. There was a downtrend from 2014 until recently when it broke. It tested the trend line after breaking it and then bounced off it. It looks healthy.

In energy, this turned out to be #1 in his valuations, with good potential of about 40% on the upside. He thought that the stock would base at about $14-$15. It got there and then dropped to $10, and then just as quickly shot back up again, so didn’t give him time to get the stock when it was cheap. If you are looking for a cheap oil stock, this is it.

Nat Gas has bucked the trend a little bit. We made a bottom in September. We are at the top of the 200 day. We will probably run into resistance in the $15 range. It will probably do better than a pure oil play.

Has been out of this sector for about a year, but currently has his eye on it. Part of the screening he does is now starting to see some names perk up into that area. This ranks in about the middle of his pack. He would wait for it to move a little bit higher in his ranking, as well as some improvement technically.

Gas compression. There are tail winds on the business. Watch it for a year or two before getting in. We need to see the global economy pick up.

A global leader in Nat Gas processing. He is impressed with the company. The backlog book, however, has been going down sharply. It is not trading at a level that gives you pause for concern. He likes the company so it is not the time to sell.

Oil/gas services and this is one of the better quality businesses, but this is not the time to be going Long. There are a couple of other names that he probably likes better, but is in a “wait and see” mode with oil in the high $50-$60. We could be sitting at this price level for a while.

He is not a big fan of the energy sector. Chart shows the stock had a big down and a trading bounce, but it is down again. This is for traders, not investors.

Was previously Nat Gas aligned. Now they went through a bulking up of all types of energy systems. Acquired AXIP in Latin America, which is a tremendous fit for them. Back log is going up, distributions have to go up.