SPKE

Spark Energy, Inc.

Energy, Event Driven/Special Sit, Utilities


Presented:03/14/2018
Price:$12.70
Cap:$0.17B
Current Price:$11.00
Cap:$0.04B

Presented

Date03/14/2018
Price$12.70
Market Cap$0.17B
Ent Value$0.41B
P/E Ratio10.54x
Book Value$2.76
Div Yield5.71%
Shares O/S13.14M
Ave Daily Vol270,390
Short Int44.73%

Current

Price$11.00
Market Cap$0.04B
Spark Energy, Inc. engages in the supply and retail of electricity and natural gas. The company operates through two segments: Retail Natural Gas and Retail Electricity. The Retail Natural Gas segment purchases natural gas supply through physical and financial transactions with market counterparts and supply natural gas to residential and commercial consumers pursuant to fixed-price, variable-price and flat rate contracts. The Retail Electricity segment supplies through physical and financial transactions with market counterparts and independent system operators and supply electricity to residential and commercial consumers pursuant to fixed-price and variable price contracts. The firm also provides green energy solutions and offers renewable electricity and carbon neutral natural gas products. Spark Energy was founded in 1999 and is headquartered in Houston, TX.

Publicly traded companies mentioned herein: Just Energy Group Inc (JE CN; JE), Morgan Stanley (MS), Spark Energy Inc (SPKE), Vistra Energy Corp (VST)

Highlights

The presenter is long Spark Energy (SPKE) following its announcement that the company has engaged Morgan Stanley as its advisor “to evaluate strategic alternatives” (March 8, 2018). In his opinion, retail energy service businesses are “not the best businesses”; however, the setup for Spark is interesting because his takeout value is $20/ share. He bases this on the potential for up to $50MM in synergies to be had if a larger player such as Vistra, which like Spark is headquartered in Texas, were to acquire the business.

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Idea Discussion

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