T-3 Energy (TTES) Reports Results Ahead of Expectations
Posted on August 1, 2007
A day ago, T-3 Energy (TTES - first recommended at $12.13), reported financial results which handily beat Wall Street estimates. The company’s bottom-line jumped 50% year-over-year to $0.60 per share, on a 36% increase in revenue.
These results beat the high-end estimate from Bear, Stearns of $0.55 per share. For the full 2007 year, Bear now expects TTES to earn $2.35 per share. The analyst over at Pritchard Capital has the company earning $2.40 per share in 2007.
Interestingly, despite the continued strong results from TTES and the company’s solid growth opportunities, the stock still trades at a discount to its peer group. As we have noted in the past, this discount is probably related to the fact the company has only recently become attractive to institutions following a secondary back in April which shed the huge ownership position which First Reserve Fund had in TTES. As such, it is still taking some time for the company to market itself to Wall Street.
Nevertheless, the stock has performed very well this year, and is up about 45% since we reiterated a buy on the stock in April. Despite the solid gains, we still recommend holding onto the shares, as we think that with time, assuming continued positive earnings suprises, the stock will trade at a premium to its peers, given the company’s higher growth rate and more substantial expansion opportunities.
The comments from the Pritchard analyst sums up the situation pretty well:
“With a $500 million universal shelf, an un-drawn credit facility and a debt free balance sheet, TTES has the ability to fund substantially higher growth than we are assuming. We believe that a $6/share number is achievable long term if the company is successful in penetrating the wellhead market with the same success it has done in the BOP business. Acquisition growth could make that estimate low as well. “
Disclaimer: We own shares in TTES. This site may include market analysis and we may own shares in the stocks mentioned in our reports. All ideas, opinions, and/or forecasts, expressed or implied herein, are for informational purposes only and should not be construed as a recommendation to invest, trade, and/or speculate in the markets. Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts, expressed or implied herein, are committed at your own risk, financial or otherwise.
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This site may include market analysis and we may own shares in the stocks mentioned in our reports. All ideas, opinions, and/or forecasts, expressed or implied herein, are for informational purposes only and should not be construed as a recommendation to invest, trade, and/or speculate in the markets. Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts, expressed or implied herein, are committed at your own risk, financial or otherwise.