DRQ

Dril-Quip Inc

Industrial/Transportation, Energy


Presented:05/29/2018
Price:$46.70
Cap:$1.76B
Current Price:$14.83
Cap:$0.99B

Presented

Date05/29/2018
Price$46.70
Market Cap$1.76B
Ent Value$1.19B
P/E RatioN/A
Book Value$34.22
Div Yield0%
Shares O/S37.73M
Ave Daily Vol567,435
Short Int19.18%

Current

Price$14.83
Market Cap$0.99B
Dril-Quip, Inc. engages in the design, manufacture, sale and services engineered offshore drilling and production equipment that is well suited for use in deepwater, harsh environment and severe service applications. Its products consist of subsea and surface wellheads, subsea and surface production trees, subsea control systems and manifolds, mudline hanger systems, specialty connectors and associated pipe, drilling and production riser systems, liner hangers, wellhead connectors and diverters which are used by major integrated, large independent and foreign national oil and gas companies in offshore areas throughout the world. The company was founded by Larry E. Reimert, Gary W. Loveless, Gary D. Smith and J. Mike Walker in 1981 and is headquartered in Houston, TX.

Publicly traded companies mentioned herein: Dril-Quip Inc (DRQ)

Highlights

The presenter is short shares of Dril-Quip (DRQ) due to earnings quality issues and an inability to generate profits given where oil is trading. At ~$47, the risk/reward appears to be favorable as Street numbers for 2019 are baking in YoY growth for both revenue and EBITDA. While the balance sheet is “good” with net cash just below $500MM, DRQ’s “real earnings power” is unlikely to ever return to ~$5/share, as bulls hope. In the presenter’s opinion, the right number is closer to $1.50/share, and applying a 15x - 20x multiple implies a $22 - $30 price target range.

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Idea Discussion

Commentor 1 - 2 weeks ago

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