KLXI
KLX Inc
Industrial/Transportation
04/06/2015
Presented
| Date | 03/31/2015 |
| Price | $38.54 |
| Market Cap | $2.02B |
| Ent Value | $2.75B |
| P/E Ratio | 22.9x |
| Book Value | $49.91 |
| Div Yield | N/A |
| Shares O/S | 52.46M |
| Ave Daily Vol | 920,000 |
| Short Int | 4.10% |
Current
| Price | $62.99 |
| Market Cap | $3.20B |
| KLX Inc., together with its subsidiaries, distributes aerospace fasteners and consumables, and provides services and products for the oil and gas industry. It operates through two segments, Aerospace Solutions Group (ASG) and Energy Services Group (ESG). The ASG segment distributes bolts, clips, hinges, rings, screws, carbon-faced seals, gaskets, O-rings, and others; chemicals, sealants and adhesives, lubricants, paints, cleaners, and degreasers; Honeywell proprietary parts; and bearings, tooling, electrical components, and clamps. This segment also provides inventory management services and customer services. It serves commercial airlines; business jet and defense original equipment manufacturers and their subcontractors; maintenance, repair, and overhaul operators; and fixed base operators worldwide. The ESG segment offers onshore completion services, including placement and removal of flow control nipples and valves, completion packers, bridge plugs, and composite flow through frac plugs, as well as downhole services tools; and wireline services, such as composite frac plug pump downs, pipe recovery and perforation, and evaluation and logging services. This segment also provides pressure control services and rental equipment to assist its clients at the well site; machine shop services, which consist of CNC lathes, milling machines, spindle lathes, and other machining equipment to rework and rectify damaged equipment and to design/build specialized fit-for-purpose tools; and fishing (retrieval) services and equipment. In addition, it offers mobile, customizable workforce accommodations and offices, and associated rental equipment to its customers at their remote field locations, as well as on-site customer services. It primarily serves regional or independent oil companies in North America. KLX Inc. is based in Wellington, Florida. |
Publicly traded companies mentioned herein: B/E Aerospace Inc (BEAV), KLX Inc (KLXI
Highlights
The presenter is long shares of KLX Inc (KLXI) following its recent spin-off from B/E Aerospace (BEAV). The strength of the aerospace cycle has likely led to cyclical depression of Aerospace Solutions Group (ASG) sales, and the slide in oil prices has made “everything touching energy (including KLXI’s Energy Services Group (ESG)) relatively unattractive. He sees this as an opportunity to buy into a KLX management team - led by former BEAV founder and CEO Amin Khoury - that has characterized the opportunity to buy distressed energy assets over time as “generational.” With 20% upside just to get back to the $47 level, where KLXI began trading as an independent company in December 2014, and $2 of downside to recent lows, the presenter is comfortable with the risk/reward.
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