The Buy Thesis
The buy thesis for CorEnergy Infrastructure (NYSE:CORR) is very simple. It recently made a large and accretive acquisition that has not yet been priced in. Our analysis shows that the acquisition will increase FFO/share by a range of $0.04 to $0.087 and improve diversification, yet the stock has dropped ~7% since the purchase was announced on 1/14/14. Before we get to the specifics of the acquisition, I would like to detail why the market pricing does not reflect the accretion.
Origin of opportunity
Since CorEnergy is a very small company with a market cap of only $162mm, the $50mm commitment of the acquisition requires raising capital. CORR has elected to do this with the issuance...