MEOH

Methanex Corporation

Industrial/Transportation


Presented:01/07/2014
Price:$57.10
Cap:$5.46B
Current Price:$40.89
Cap:$2.76B

Presented

Date01/07/2014
Price$57.10
Market Cap$5.46B
Ent Value$6.16B
P/E Ratio11.69x
Book Value$19.35
Div Yield1.8%
Shares O/S95.69M
Ave Daily Vol420,000
Short IntN/A

Current

Price$40.89
Market Cap$2.76B
Methanex Corporation produces, supplies, and sells methanol to petrochemical producers and distributors. The company also purchases and re-sells methanol produced by others. Its methanol is a clear liquid commodity chemical that is used to produce traditional chemical derivatives, including formaldehyde, acetic acid, and various other chemicals. The company’s methanol is used in energy-related applications; for blending into gasoline, as a feedstock in the production of dimethyl ether, which can be blended with liquefied petroleum gas for use in household cooking and heating, and in the production of biodiesel; and to produce methyl tertiary-butyl ether, a gasoline component, as well as used into olefins applications. In addition, it operates a fleet of methanol ocean tankers with a capacity ranging from 3,000 to 100,000 deadweight tons. The company has a network of production hubs and terminals in North and South America, New Zealand, Europe, the Middle East, and Asia, as well as distributed terminals and storage facilities located throughout in the U.S Gulf Coast, the Mediterranean, Northwest Europe, Korea, and South China. Methanex Corporation was founded in 1968 and is headquartered in Vancouver, Canada.

Highlights

The presenter is long shares of Methanex, and believes the recent pullback from the mid-$60s to the high $50s represents a buying opportunity. With ~15% of global share, Methanex is the largest producer of methanol in the market, and the company stands to benefit from favorable supply/ demand dynamics for the foreseeable future. Based on his scenario analysis, the presenter believes the stock could trade up to the $90-$120 range over the next 12-18 months.

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Idea Discussion

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