GTLS

Chart Industries Inc

Industrial/Transportation, Energy


Presented:10/17/2019
Price:$59.27
Cap:$2.12B
Current Price:$124.56
Cap:$5.33B

Presented

Date10/17/2019
Price$59.27
Market Cap$2.12B
Ent Value$2.83B
P/E Ratio43.42x
Book Value$33.48
Div Yield0%
Shares O/S35.79M
Ave Daily Vol442,688
Short Int15.85%

Current

Price$124.56
Market Cap$5.33B
Chart Industries, Inc. engages in the manufacturing of engineered equipment for the industrial gas, energy, and biomedical industries. It operates through the following business segments: Energy and Chemicals, Distribution and Storage Western Hemisphere, and Distribution & Storage Eastern Hemisphere. The Energy and Chemicals; and Distribution and Storage segment manufacture products used primarily in energy-related and industrial applications, such as the separation, liquefaction, distribution, and storage of hydrocarbon and industrial gases. The company was founded in 1992 and is headquartered in Ball Ground, GA.

Publicly traded companies mentioned herein: Chart Industries Inc (GTLS), Liquefied Natural Gas Ltd (LNG AU)

Highlights

The presenter is short shares of Chart Industries Inc (GTLS), which he views as extremely cyclical. GTLS sells engineering equipment into multiple energy and industrial gas end markets. Market sentiment is quite positive on liquefied natural gas (LNG), as the United States has moved past the large wave of LNG liquefaction plants built in 2013 – 2014 and companies now have a new wave of LNG plants in their backlogs. The presenter notes that since GTLS stock is very sensitive to the backlog of the company, the best time to short the stock is when backlog optimism is highest. According to him, optimism on its LNG backlog is “misplaced” due to investor misunderstanding of how this cycle will differ from the last cycle. GTLS is trading at ~$60 per share, but he sees downside to the low-$40 range (~18x mid-cycle earnings) based on his expectation of earnings disappointments. 

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Idea Discussion

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