TTI

Tetra Technologies, Inc.

Industrial/Transportation, Energy


Presented:02/02/2022
Price:$2.96
Cap:$0.38B
Current Price:$3.23
Cap:$0.42B

Presented

Date02/02/2022
Price$2.96
Market Cap$0.38B
Ent Value$0.56B
P/E RatioN/A
Book Value$0.80
Div Yield0%
Shares O/S126.94M
Ave Daily Vol994,972
Short Int1.45%

Current

Price$3.23
Market Cap$0.42B
TETRA Technologies, Inc. is a geographically diversified oil and gas services company, which engages in the completion of fluids and associated products and services. It operates through the following segments: Completion Fluids and Products and Water and Flowback Services. The Completion Fluids and Products division manufactures and markets clear brine fluids, additives, and associated products and services to the oil and gas industry. The Water and Flowback Services division provides onshore oil and gas operators with comprehensive water management services. The company was founded in 1981 and is headquartered in The Woodlands, TX.

Publicly traded companies mentioned herein: Apollo Global Management Inc (APO), BP PLC (BP LN), Standard Lithium Ltd (SLI), TETRA Technologies Inc (TTI)

Highlights

The presenter is long shares of TETRA Technologies Inc (TTI), which has historically been known as an oilfield service company and has traded in line with O&G stocks. TTI has two main legacy businesses (completion fluids and water management). He is bullish on the legacy businesses, eyeing an inflection based on an improving O&G market this year that should benefit both segments. This core business can now stand on its own and will start realizing strong incremental margins, and as such he reaches a combined price target for these segments of $5 per share, which represents strong upside from the current $3 share price. There is limited downside to the current price since TTI hasn’t rallied with the other O&G stocks even though it is highly correlated to the same factors. In addition to the upside on the legacy businesses, he sees an incremental $2 per share from existing NOL carryforwards. There are also several sources of optionality stemming from ESG opportunities born out of TTI’s core competencies that raise his upside case to $11 per share. 

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Idea Discussion

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