Seeking Alpha

Value Plus Incentives

View as an RSS Feed
PRO Top Ideas
Top Ideas are high-conviction long or short ideas focused on market mispricings with asymmetric risk/reward profiles.
  • Spin-Off NOW, Inc: Market Leadership, Experienced Management, And Pristine Balance Sheet Point To Compounding Value
     • Fri, Sep. 12 DNOW 19 Comments


    • DistributionNOW or NOW, Inc. (DNOW), the recent spin-off from National Oilwell Varco, Inc. (NOV), ranks second by market share in the fragmented but fast consolidating energy distribution market.
    • DNOW’s pristine balance sheet – $236 million in cash, no debt – and low cost of capital should facilitate organic market share gains and rapid growth via M&A activity.
    • In contrast, DNOW’s primary competitor and market leader, MRC Global (MRC), has much higher leverage and now needs to enter a period of de-leveraging, which will likely slow growth.
    • DNOW’s management team has a 10 year, successful track record of accretive M&A. The spin-off is only the most recent in a long series of strategic actions to create value.
    • DNOW’s operating margins are likely to inflect significantly higher after digesting two large acquisitions and transitioning to a global ERP system.
  • MSC Industrial Direct: Owner-Operators Consolidating The Attractive MRO Distribution Market
       • Dec. 20, 2013 MSM 10 Comments
  • Leucadia National: SOTP Points To 20-30% Upside
       • Nov. 15, 2013 LUK 21 Comments
  • The Long Case For Ingredion, Inc.
       • Aug. 20, 2013 INGR 3 Comments
  • CST Brands: Valero's Spin-Off Is Currently Undervalued And Under-Earning
       • May. 13, 2013 CST 21 Comments