RE:Resuming Coverage Post Certarus Acquisition CloseThis all sounds great!! Why is the s/p down so much in the last month? S/p going down, not up? Hard to figure the market?
This is either a great buy or we're all missing something?
Schussing56 wrote: TD Securities:
We believe the rationale for the Certarus transaction is clear. Certarus' business model presents significant similarities to SPB (recession resilient energy distribution platform with limited commodity price exposure and scale benefits) but with strong tailwinds from decarbonization efforts by commercial/industrial companies looking to displace diesel. The CNG distribution market is large, with an estimated $6bn-$8bn TAM today and growing rapidly as new end-market applications are continuously developed. Certarus has a significant first mover advantage with no other competitors having meaningful scale. However, perhaps most appealing is Certarus' history of strong cash generation and its largely self-funded growth, with its mobile storage units, "MSUs", generating 20% plus annual returns. Currently, growth in demand for CNG supply is far outpacing distribution capacity, providing Certarus pricing power and the ability to be selective with its customer agreements; we anticipate this dynamic will drive strong growth and profitability near-term.
Curtis Philippon, the CEO of Certarus, has acquired more than 700,000 Superior (SPB) shares since May 31.