Don't bounce Enterprise Group. I'm not yet done buying!!With Enterprise trading at 4.6X 2015 EPS one has to wonder what kind of affect these lower crude oil prices will actually have on Enterprise group earnings? Most of the customers that Enterprise services are either in the infrastructure business or natural gas production and liquids business in the Western Sedimentary Basin. That being said, has nobody noticed that Nat Gas is pretty much flat right now? Don't forget the lower Canadian dollar will add around 10% to the spot price and Nymax November futures are trading at $3.8US per MBTU.
Consensus Analysts are at $0.13 EPS for 2015(see below) for Enterprise Group.:
https://www.theglobeandmail.com/globe-investor/markets/stocks/analysts/?q=E-T
Company is trading at around 3.25X 2014 EBITDA. As my estimate is for $30 Million EBITDA in 2014 with 10Million coming in Q3 and 11Million coming in Q4 plus the 9Million that was earned in H1 of 2014. Which i believe is pretty concervative especially when one considers the CAPX program and acqusition completed.
At some point in the near future it might make sense for Enterprise Group to buy back stock rather than invest in more equipment with its future cashflow because this is getting downright stupid. After all we just bought a PRIVATE company for 3.3X EBITDA that had no previous access to capital markets and had vertually no share liquidity. How we can trade for the same price as a Publicly listed diversified company does not make any logical sense. I think this is a big buying oppertunity.
Any other thoughts?