Dane Bowler
Value, hedge fund analyst, REITs, registered investment advisor

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...

Join Seeking Alpha PRO to read this archived article and 11,574 other archived articles
  • Access Top Ideas, chosen by Seeking Alpha’s editors
  • Filter long and short ideas by market cap and sector
  • Get Coverage of over 5,000 stocks, many of which have little or no coverage elsewhere
"In just the first month of using PRO, I used it to generate two ideas which were actionable for me. As a result of these two positions, I have earned more than 20 times the annual subscription costs for PRO." Michael Yagemann, Greenbridge Capital
"I am pleasantly surprised with the scope of small and mid-cap coverage PRO offers. You can't find that any where else." Patrick Rice, Mainstay Capital Management
100% Satisfaction Guaranteed
Money back guarantee. Seeking Alpha PRO members receive a no-questions-asked refund for membership on months paid and not used. Details