Dane Bowler
Value, hedge fund analyst, REITs, long/short equity

An Accretive Acquisition Makes CorEnergy A Near-Term Buy Opportunity

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...

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