Teekay Corporation: Top Idea For 2017, Catalyst-Driven 3x Potential


  • Teekay Corporation is a massive shipping holding company focused on major global projects including LNG transport, offshore oil production, crude oil transport, and maritime logistics.
  • TK is the general partner and major unitholder for two primary 'daughter firms:' Teekay Offshore Partners (TOO) and Teekay LNG Partners (TGP). The combined group has a $20B backlog.
  • The extreme high-yield and oil-related panic in late-2015 led to management's decision to slash subsidiary payouts by 80% and parent-level payouts by 90% in order to self-fund remaining growth.
  • This decision led to an enormous revaluation, from $30-40 to $6-11. With growth financing practically complete, distribution growth is likely to return by mid-2017.
  • Distribution recovery could lead to massive revaluation as TK will return to cash flow potential valuation. TK is my top idea for 2017: One-year target of $18+.

Note: The following report reflects my personal opinion only. I've spent months developing this thesis, but the included valuation targets are purely driven by my opinion of this firm. All investors should always conduct their own full due diligence before making any allocation decisions. Nothing in this report reflects an investment recommendation on behalf of J Mintzmyer nor Mintzmyer Investments LLC. Members of Value Investor's Edge received a first look at this report.


The following report reflects my bullish thesis for Teekay Corporation (NYSE:TK), which is my top idea for 2017. I have been developing this thesis and increasing exposure during the past few months as TK's prospects continue to improve at a steady pace while the share price has languished. The precise timing of this report was spurred by Seeking Alpha's "Catalyst-Driven" contest.

Our bullish thesis on TK:

TK's future valuation is nearly 80% dependent on cash flows and ownership stakes in its two partnership 'daughter' firms: Teekay LNG Partners (TGP) and Teekay Offshore Partners (TOO). When TK traded based on this method of valuation, between 2010 and 2015, the shares traded between $21 and $67. Over the past 11 months, spurred by a dividend cut, TK has been erroneously revalued by virtually all mainstream analysts based on its own limited operating assets. TK stock has recently traded in tight correlation to oil prices, while the vast majority of Teekay Group's $20B fee-based backlog is not directly related to the current oil pricing.

TK's operating assets and TNK stake are worth under 20% of the upside target price. This flawed 'mainstream' valuation and erroneous trading correlation to oil has led to TK trading between a range of $6 and $11 since December 2015. During 2017, TK daughter TGP is likely to fully restore its distribution payout, which will lead to a gigantic shift in market perceptions and

This article was written by

J Mintzmyer profile picture
The ultimate shipping and logistics platform.
BS in Economics, MA in Public Policy (International Economics), pursuing Doctoral in Public Policy (Intl Relations). J is an established independent research provider and hedge fund consultant in the maritime shipping sector.

Mintzmyer founded Value Investor's Edge, a top-ranked deep value research service in May 2015, with the goal of establishing a top-tier community of deep value investors and activists. Value Investor's Edge subscribers leverage exclusive in-depth analytic reports and community investment experience to discover disconnects in global shipping and a variety of other beaten down sectors.

As part of directing Value Investor's Edge, Mintzmyer works with a team of five analysts and data technicians to deliver quality research and analytics to over 500 members. He has interviewed numerous management teams at public maritime firms, and has worked with a multitude of investors. Mintzmyer's exclusive analysis has received frequent 'Top Idea,' 'Must Read,' and 'Small Cap Insight' awards at Seeking Alpha and he is commonly cited in industry news such as TradeWinds and Splash 24/7.

Pursuing a Doctorate in Public Policy (Intl Relations) from Harvard University. M.A. in Public Policy, with focus on International Security & Economic Policy from the University of Maryland. Distinguished Graduate of the United States Air Force Academy with a B.S. in Economics. Extensive background in financial analysis, equity research, accounting, portfolio management, and customized asset allocation through nearly a decade of formalized education, personal studies, and practical experience. Avid reader of business/investments and biographies.

Legal Disclaimer: Any related contributions to Seeking Alpha, or elsewhere on the web, are to be construed as personal opinion only and do NOT constitute investment advice. An investor should always conduct personal due diligence before initiating a position. Provided articles and comments should NEVER be construed as official business recommendations. In efforts to keep full transparency, related positions will be disclosed at the end of each article to the maximum extent practicable. The majority of trades are reported live on Twitter, but this cannot be guaranteed due to technical constraints.

My premium service is a research and opinion subscription. No personalized investment advice will ever be given. I am not registered as an investment adviser, nor do I have any plans to pursue this path. No statements should be construed as anything but opinion, and the liability of all investment decisions reside with the individual. Although I do my utmost to procure high quality information, investors should always do their own due diligence and fact check all research prior to making any investment decisions. Any direct engagements with readers should always be viewed as hypothetical examples or simple exchanges of opinion as nothing is ever classified as “advice” in any sense of the word.

Disclosure: I am/we are long TK, TGP, TNK. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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