MUSA

Murphy USA, Inc.

Consumer


Presented:03/09/2018
Price:$76.61
Cap:$2.67B
Current Price:$485.99
Cap:$9.96B

Presented

Date03/09/2018
Price$76.61
Market Cap$2.67B
Ent Value$3.52B
P/E Ratio11.09x
Book Value$21.66
Div Yield0%
Shares O/S34.90M
Ave Daily Vol337,813
Short Int14.36%

Current

Price$485.99
Market Cap$9.96B
Murphy USA, Inc. engages in the motor fuel products and convenience merchandise through retail stores, namely Murphy USA and Murphy Express. It provides Walmart discount program which offers a cents-off per gallon purchased for fuel when using specific payment methods. The company was founded on March 1, 2013 and is headquartered in El Dorado, AR.

Publicly traded companies mentioned herein: Casey’s General Stores Inc (CASY), Murphy Oil corporation (MUR), Murphy USA Inc (MUSA), Walmart Inc (WMT)

Highlights

In late 2013, Murphy Oil completed the spin-off of Murphy USA (MUSA). Since that time, a series of favorable macro factors have, in the presenter’s opinion, diverted attention away from the risks/ headwinds that the company must deal with. MUSA owns and operates ~1,450 total units (gas stations and c-stores/ kiosks), and in early 2016 its agreement with Walmart to develop new Supercenter gas stations ended. With most of its stores on or near Walmart’s stores, there’s no major differentiating characteristics that give MUSA an advantage in a market that’s no longer seeing declining gas prices/ rising RINs or stable tobacco/ cigarette trends. Additionally, the benefits from capital allocation and company specific initiatives are waning, and the presenter sees material downside risk for shareholders. Given the setup, he is short at $76 and views the stock as mispriced due to a high probability of meaningful negative EBITDA revisions over the next 12 - 24 months.

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