YPF

YPF Sociedad Anonima

Energy, Utilities


Presented:11/15/2017
Price:$22.26
Cap:$8.75B
Current Price:$25.74
Cap:$10.12B

Presented

Date11/15/2017
Price$22.26
Market Cap$8.75B
Ent Value$17.37B
P/E Ratio67.09x
Book Value$19.12
Div Yield1.01%
Shares O/S393.05M
Ave Daily Vol1,018,137
Short IntN/A

Current

Price$25.74
Market Cap$10.12B
YPF SA is engaged in the exploration, production and distribution of oil and gas. It operates through the following segments: Exploration and Production, Downstream, Gas & Power, and Corporate and Other. The Exploration and Production segment includes contractual purchases of natural gas and purchase of crude oil arising from service contracts and concession obligations, as well as crude oil and natural gas intersegment sales. The Downstream segment involves in refining, transport, purchase of crude oil and natural gas; and marketing of crude oil, natural gas, refined products, petrochemicals, electric power generation and natural gas distribution. The Gas and Power segment includes the transportation, distribution and commercialization of natural gas to third parties, natural gas liquid, regasification services and electricity generation. The Corporate and Other segment includes corporate administrative expenses and assets, construction activities and the environmental remediation. The company was founded on June 2, 1977 and is headquartered in Buenos Aires, Argentina.

Publicly traded companies mentioned herein: Chevron Corp (CVX), Exxon Mobil Corp (XOM), Petroleo Brasileiro SA (PBR), Royal Dutch Shell PLC (RDS/A), Schlumberger Ltd (SLB), YPF SA (YPF)

Highlights

The presenter is long shares of Argentina’s YPF at $23. He sees a favorable risk/ reward setup given multiple recent developments that could be positive for the company, and its stock, in the long-run. First, the political and macroeconomic backdrop has improved as the recent midterm elections solidified President Macri’s alliance and ability to move forward with pro-business (and growth) reforms. Second, Argentina’s long-standing (16 years) price “fixing” for domestic fuel has been lifted and as of November 1, 2017, YPF took a price increase. Third, and the development that provides the most optionality for shareholders, is the potential for substantial value being created as unconventional drilling is tested in the Vaca Muerta shale play.

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