Bob Robotti's Presentation on Calfrac Well Services: Value Investing Congress

Continuing coverage, we're posting up notes from the Value Investing Congress.  Below are notes and the presentation of Bob Robotti of Robotti & Company Advisors.  His presentation was entitled 'Building an Investment Thesis.'

Calfrac Well Services (CFW)

Robotti follows classic value investing tenets.  His pitch was Calfrac Well Services (CFW) traded on the TSX.

$1.3B EV, oil services, 90% of revenue is from fracking. Says 80-100% upside on stock if natural gas demand remains flat.

Bear case is well known, low gas prices, oversupply of equipment. He gave a long presentation on the impact of cheap gas in the US, which should also help chemical companies.  (This is basically Nancy Lazar at ISI argument, very similar.)

Price target is double the current price, from $24 to $47.  Models revenue up about 53% from here.

Embedded below is Robotti's slideshow presentation from the Value Investing Congress: 




Check out the rest of the hedge fund presentations from the Value Investing Congress.

Bob Robotti's Presentation on Enterflex: Value Investing Congress

Continuing our coverage, today we're posting up more notes from the Value Investing Congress.  Below are notes and the slideshow presentation from Bob Robotti of Robotti & Company.  He presented the bull case for Enterflex (TSE: EFX).

He thinks natural gas will fill the hydrocarbon gap in the coming decades.  1mm ft cubic is energy of 1 barrel oil - historically interchangeable with 1 barrel of oil.  The following notes are courtesy of Kyle Mowery from GrizzlyRock Capital.

Investment Opportunity: Enterflex (TSE:EFX)

•    Installs compression and processing equipment.
•    $980MM EV
•    Decade long drilling activity 
•    Started trading in June 2011
•    Oil and gas firms are end customers
•    Service is 21% of revenues – key component to this firm.  Expected to grow to 40% of revenue in next 3 years.
•    Oil compressors – leverages due to fracking technology as fracked gas comes out of the well as low compressed volumes. 
•    Engines – Caterpillar and Waukesha was 50% (Cat been growing significantly). Waukesha bought by GE from private equity backing.  Enterflex distributor for Waukesha. 
•    2% dividend yield and share buyback.
•    Intrinsic value is $18 to $24 per share. 6.0x to 8.0x multiple on the business. 
•    Competitive advantage – engine part important (distribution system).  As Waukesha engines (Enterflex US distributor) get better from GE engineering this drives margins higher including


Embedded below is Robotti's presentation on oil versus natural gas:




Be sure to click here for other presentations from the Value Investing Congress.