WEX

WEX Inc

TMT, Finance/Real Estate


Presented:01/09/2019
Price:$155.00
Cap:$6.68B
Current Price:$213.76
Cap:$8.78B

Presented

Date01/09/2019
Price$155.00
Market Cap$6.68B
Ent Value$10.59B
P/E Ratio29.9x
Book Value$42.68
Div Yield0%
Shares O/S43.10M
Ave Daily Vol466,839
Short Int3.02%

Current

Price$213.76
Market Cap$8.78B
WEX, Inc. engages in the provision of payment processing and information management solutions. It operates through the following segments: Fleet Solutions; Travel and Corporate Solutions; and Health and Employee Benefit Solutions. The Flight Solutions segment provides payment and transaction processing services for the needs of commercial and government fleets. The Travel and Corporate Solutions segment focuses on the payment environment of business-to-business payments, providing customers with payment processing solutions for their corporate payment, and transaction monitoring needs. The Health and Employee Benefit Solutions segment involves healthcare payment products and SaaS consumer directed platforms, as well as payroll related benefits to customers. The company was founded by Parker Poole III and William Richardson in 1983 and is headquartered in South Portland, ME.

Publicly traded companies mentioned herein: Chevron Corp (CVX), FleetCor Technologies Inc (FLT), Royal Dutch Shell PLC (RDS/A), WEX Inc (WEX)

Highlights

The presenter is long WEX, seeing “a couple of interesting pieces of the story” driving solid gains for shareholders over the next 12 - 18 months. The stock sold off “hard” as the price of oil declined, dropping as low as $131 in Dec ‘18 (down from $200 earlier in the year); however, WEX is less sensitive to oil than it was 3 - 4 years ago, and it could benefit from a tailwind for diesel fuel. At ~$150/share (14.5x his 2020 EPS estimate, which is roughly in line with the Street) and ~6% FCF yield, WEX’s valuation is attractive. The company could grow earnings 15% - 20% over the next few years (inclusive of M&A) and is deserving of a 20x multiple, which implies upside of 33% or better - to $200+ - over the next 12 - 24 months.

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Idea Discussion

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