NOW Inc.: A Combination Of Pipeline And Clear Energy Projects Will Fuel Its Low Relative Valuation

Nov. 09, 2022 1:59 PM ETNOW Inc. (DNOW)
Badsha Chowdhury profile picture
Badsha Chowdhury
1.15K Followers

Summary

  • Higher demand in crude pipeline transfer, chemical injection applications, and water transfer can benefit NOW in the short-to-medium term.
  • Along with the traditional MRO and PVF sales, NOW sees prospects in carbon capture and DigitalNOW projects.
  • Despite negative cash flows, robust liquidity will allow shareholders' returns through share repurchase.
  • I believe the stock is relatively undervalued at this level.

Oil Refinery And Pipeline In Desert During Sunset

imaginima

DNOW Is Still Attractive

I discussed NOW Inc.'s (NYSE:DNOW) strengths and weaknesses in detail in my previous article. Despite the short-term weakness in the economy, demand is rising in crude pipeline transfer, chemical injection applications, and water transfer projects. Its performance

Producer Price Index: Iron and Steel Mills and Ferroalloy Manufacturing Index

Federal Reserve Bank of St. Louis

Change in Industry Indicators

NOW Inc.'s Filings

Quarterly revenues

NOW Inc.'s Filings

Rating history

Seeking Alpha

Relative valuation

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Total returns

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This article was written by

Badsha Chowdhury profile picture
1.15K Followers
I have more than 14 years of experience in analyzing and writing on stocks. I write on both long and short sides in an unbiased manner. I have been covering the energy sectors for the past 7 years, with the primary focus on the oilfield equipment services sector. I also cover the Industrial Supply industry. I occasionally co-author with Seeking Alpha contributor Thomas Prescott.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. 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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