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Strategies & Market Trends : Value Investing
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To: Anne Kourtidis who wrote (62420)9/1/2019 9:04:06 PM
From: E_K_S  Read Replies (1) of 78748
 
Welcome to the Value Investing Board. A brief over view on EXTN

Exterran Corporation is involved in compression, production and processing products and services of the oil and natural gas industry. The company's product lines include natural gas compression, process & treating and production equipment and water treatment solutions. Exterran Corporation is headquartered in Houston, Texas.

I typically will look at company ratios specifically PE. I see no earnings but 2019 estimates are -$0.44/share and turn positive to $0.23/share in 2020. So there is light but even using the high estimate for 2020 at $0.37/share forward PE would be 28x. Still pretty high.

I then look at Price/Book Value = 0.70 so there appears to be some value there. No dividend either.

The big problem I see is in their balance sheet w/ long term debt. It is growing over last few quarter to $489 mln last quarter up from $404mln from Dec 2018. If that was falling by 20% and not growing 20%, I might consider a position.



For me debt is just too large at this time in the cycle. I would dig deeper to see what type and how much is going to mature and may need to be rolled over. It could become an issue w/ possible negative interest rate environment and what their plan is if any.

I really like the sector and would like to find a value play but am holding off on any new positions that (1) carry a lot of debt, (2) need to pay a dividend, and (3) PE at or below S&P or 18x.

That's ny first take so I will pass on this one.

EKS
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