HSC

Harsco Corp

Industrial/Transportation


Presented:04/08/2020
Price:$8.90
Cap:$0.70B
Current Price:$10.40
Cap:$0.83B

Presented

Date04/08/2020
Price$8.90
Market Cap$0.70B
Ent Value$2.63B
P/E RatioN/A
Book Value$9.45
Div Yield0%
Shares O/S78.78M
Ave Daily Vol1,282,551
Short Int6.67%

Current

Price$10.40
Market Cap$0.83B
Harsco Corp. engages in the provision of industrial services and engineered products. It operates through the following business segments: Harsco Environmental, Harsco Clean Earth, and Harsco Rail. The Harsco Environmental provides environmental services and material processing to the global steel and metals industries. The Harsco Clean Earth segment provides processing and beneficial reuse solutions for hazardous wastes, contaminated materials, and dredged volumes. The Harsco Rail segment provides equipment, after-market parts and services for the maintenance, repair and construction of railway track. The company was founded in 1853 and is headquartered in Camp Hill, PA.

Publicly traded companies mentioned herein: Harsco Corp (HSC), Stericycle Inc (SRCL)

Highlights

The presenter is long shares of Harsco Corp (HSC), which is in the process of transforming itself into a pure play ESG company through a series of M&A transactions. Shares of HSC were trading as high as $24 at the start of the year but have since traded down to ~$9. This can be attributed to operational issues in its Rail segment, uncertainty regarding the financing of its recent acquisition of ESOL, and general concern about the impact of COVID-19 on business operations. Yet, the presenter notes that these issues have either been addressed or are overstated, and therefore believes the stock is undervalued. Valuing the entire company at an 8x EBITDA multiple, which he considers reasonable since many ESG names trade at double digit multiples, he sees a clear path for share price to recover to its mid-$20 level with additional upside once the company becomes a pure play ESG company by EOY 2021. 

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Idea Discussion

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