Multibagger speculative ideas

[sculpin]

Bri-Chem - potential multibagger at $0.33 and was > $4 back in 2012. (BRY -TSX) (OTC:BRYFF).

 

http://seekingalpha.com/article/4021454-bri-chem-trades-cheaply-even-75-percent-move-2-months

Bri-Chem Corp. (OTC:BRYFF) is a distributor of chemicals to the oil & gas drilling industry in both Canada and the United States.

Because it is so levered to capital spending, it has high operational leverage to oil prices. This is a business that did over $180 million in revenue in 2014, trading at a $5 million market capitalization. That compares to $72 million of revenue in the trailing twelve months.

At less than 60% of NCAV, it hits the Ben Graham Sweet Spot.

 

http://www.brichem.com/

 

 

 

[rukawa]

Bri-Chem - potential multibagger at $0.33 and was > $4 back in 2012. (BRY -TSX) (OTC:BRYFF).

 

At less than 60% of NCAV, it hits the Ben Graham Sweet Spot.

http://www.brichem.com/

 

The composition of the NCAV bothers me. They have 23 million in debt against 36 million in currents assets. But of the 36 million, 27 million is inventory and 6 million is AR. Strangely they appear to have no cash. Given who their customers are you really have to hope for industry recovery in order for them to recover the AR and sell the inventory.

[sculpin]

Bri-Chem - potential multibagger at $0.33 and was > $4 back in 2012. (BRY -TSX) (OTC:BRYFF).

 

At less than 60% of NCAV, it hits the Ben Graham Sweet Spot.

http://www.brichem.com/

 

The composition of the NCAV bothers me. They have 23 million in debt against 36 million in currents assets. But of the 36 million, 27 million is inventory and 6 million is AR. Strangely they appear to have no cash. Given who their customers are you really have to hope for industry recovery in order for them to recover the AR and sell the inventory.

 

Hence speculative. Was my main worry throughout the downturn - would they be able to reduce their inventory & collect AR's to repay their debt load - so far they have been able to achieve this in the worst circumstances. Now that US & Cdn drilling & completions are turning up this will help them - question that could be asked is what is the state of the remaining inventories & AR's?

[rukawa]

Just curious. Did you find out through the Microcap investors website?

[bizaro86]

It hasn't been profiled on microcap club. (I'm a member)

 

 

[sculpin]

Just curious. Did you find out through the Microcap investors website?

 

Have owned for very long time. Been a roller coaster ride with the most recent 2 years straight down. Sale of steel division in Summer 2014 allowed them to survive & become a pure play on fluids distribution. In a reasonable market with the cost cuts, efficiencies and new locations, BRY could easily achieve $20MM+ in EBITDA. Here is what Beacon wrote in November 2 years ago at the beginning of the drilling drop....

November 14, 2014

Bri-Chem Corp. (BRY-T)

Q3 Cements Turnaround With Growing Sales and Profitability

12 Month Target: $2.75 (unch)

Rating: BUY (unch)

 

Bri-Chem reported inline sales and EBITDA that beat our expectations. Revenues were up 23% y/y to $53.3 million. The US fluids division grew 67% y/y to $21.6 million, while Canadian operations were down 4% to $23.1 million. The value-added packaging and blending segments generated sales of $9 million, up from $6.5 million a year ago.

 

The results from Q3 confirm that the move to focus only on downhole fluids has increased profitability. Adjusted EBITDA came in at $4.9 million, up from $4.2 million one year ago and better than our $4.2 million forecast. EBITDA margin was 9.2%, the highest level in 2.5 years, with gross margins slightly better than forecast in Canada. Adjusted EPS came in at $0.07, just shy of our $0.08 forecast due to higher interest and taxes. Note that reported EBITDA and EPS included a $1.6 million FX gain, which we strip out in our adjusted figures.

 

Despite the pullback in oil price recently, rig activity levels remain strong across most energy basins. We believe there remains a large market share capture opportunity in areas such as Texas and Oklahoma. Continued strong US growth means it is likely US sales will surpass Canadian sales for the first time in 2015. We are making only minor changes to our forecast, with upside available from acquisition activity.

 

Strong Q3 results have provided a reprieve for the hard hit BRY share price. Despite rallying 29% yesterday, we view BRY as inexpensive trading at less than 5x 2015 earnings and a 19% discount to current tangible book. We are maintaining a BUY rating and 12-month target price of $2.75. We use 6x 2015 EBITDA and 9x EPS to reach our target.

 

Analyst: Michael Mills, MBA, CFA

902.425.8897

[email protected]

 

[sculpin]

Bri-Chem - potential multibagger at $0.33 and was > $4 back in 2012. (BRY -TSX) (OTC:BRYFF).

 

At less than 60% of NCAV, it hits the Ben Graham Sweet Spot.

http://www.brichem.com/

 

The composition of the NCAV bothers me. They have 23 million in debt against 36 million in currents assets. But of the 36 million, 27 million is inventory and 6 million is AR. Strangely they appear to have no cash. Given who their customers are you really have to hope for industry recovery in order for them to recover the AR and sell the inventory.

 

 

 

Bri-Chem to hold Q3 2016 financial results call Nov. 10

 

2016-11-08 11:51 ET - News Release

Shares issued 23,632,981

BRY Close 2016-11-02 C$ 0.325

 

Mr. Jason Theiss reports

 

BRI-CHEM ANNOUNCES THIRD QUARTER 2016 RESULTS CONFERENCE CALL

 

Bri-Chem Corp. will hold its 2016 third quarter conference call and webcast to discuss Bri-Chem's results, outlook and related matters at 1 p.m. (EDT) on Thursday, Nov. 10, 2016. Details for the conference call are as follows:

 

Date:  Thursday, Nov. 10, 2016

 

Time:  11 a.m. MDT (1 p.m. EDT)

 

Conference call-in details:  1-866-696-5910 or 1-866-696-5910

 

Passcode:  7329280 (for participants in North America)

 

Webcast details:  go on-line

 

For all interested investors and the news media, the conference call will be available via webcast within the investors section of the company's website.

 

About Bri-Chem

 

Bri-Chem has established itself, through a combination of strategic acquisitions and organic growth, as the North American industry leader for wholesale distribution and blending of oil field drilling, completion, stimulation and production chemical fluids. The company sells, blends, packages and distributes a full range of drilling fluid products from 24 strategically located warehouses throughout Canada and the United States.

[sculpin]

Perhaps final distribution coming for MAR and MHY.un. Marret Resource Corp portfolio being cleaned up with only a few HY bond positions left now. Met coal has leveled out at a decent price after its meteoric rise from Summer 2016. If ever there was a time to sell Cline this should be it. Marret has steadfastly maintained the NAV's at their funds with substantial value realization from Cline - time to put up or shut up in 2017 I would think.

 

http://marret.ca/pdf/MAR-PH-1612.pdf

 

 

 

 

[sculpin]

Perhaps final distribution coming for MAR and MHY.un. Marret Resource Corp portfolio being cleaned up with only a few HY bond positions left now. Met coal has leveled out at a decent price after its meteoric rise from Summer 2016. If ever there was a time to sell Cline this should be it. Marret has steadfastly maintained the NAV's at their funds with substantial value realization from Cline - time to put up or shut up in 2017 I would think.

 

http://marret.ca/pdf/MAR-PH-1612.pdf

 

Marrett Resource Q4 MD&A

 

Cline Mining Update

Met coal prices were very volatile in Q4 with the peak above $300/tonne and but prices seem to have stabilized

in the $170-175 area. This is a very attractive level for the long term value creation from Cline’s assets. The

Manager is exploring several avenues to either liquidate this asset or to recapitalize Cline and move the mine

back into production.

[sculpin]

Bri-Chem - potential multibagger at $0.33 and was > $4 back in 2012. (BRY -TSX) (OTC:BRYFF).

 

http://seekingalpha.com/article/4021454-bri-chem-trades-cheaply-even-75-percent-move-2-months

Bri-Chem Corp. (OTC:BRYFF) is a distributor of chemicals to the oil & gas drilling industry in both Canada and the United States.

Because it is so levered to capital spending, it has high operational leverage to oil prices. This is a business that did over $180 million in revenue in 2014, trading at a $5 million market capitalization. That compares to $72 million of revenue in the trailing twelve months.

At less than 60% of NCAV, it hits the Ben Graham Sweet Spot.

 

http://www.brichem.com/

 

New SA write-up trying valiantly to model BRY's business...

 

https://seekingalpha.com/article/4058749-king-oil-dead-long-live-king-part-2-drill-baby-drill

 

Now trading at $0.45 with net net value (current assets minus all liabilities) at $0.57/share and book value of $1.20. Drilling rebound in North America continues to gain strength. Recent quarter provides sales & ebitda upside surprise.

[sbalsam]

Perhaps final distribution coming for MAR and MHY.un. Marret Resource Corp portfolio being cleaned up with only a few HY bond positions left now. Met coal has leveled out at a decent price after its meteoric rise from Summer 2016. If ever there was a time to sell Cline this should be it. Marret has steadfastly maintained the NAV's at their funds with substantial value realization from Cline - time to put up or shut up in 2017 I would think.

 

http://marret.ca/pdf/MAR-PH-1612.pdf

 

Marrett Resource Q4 MD&A

 

Cline Mining Update

Met coal prices were very volatile in Q4 with the peak above $300/tonne and but prices seem to have stabilized

in the $170-175 area. This is a very attractive level for the long term value creation from Cline’s assets. The

Manager is exploring several avenues to either liquidate this asset or to recapitalize Cline and move the mine

back into production.

 

I notice that you have not mentioned Marret Multi-Strategy Income Fund (MMF). This fund, while much smaller with a NAV of $1.8M attributable to the listed Class A shares, appears to own the same Cline Mining securities as MHY and MAR and trade at a discount to stated NAV approximately in line with MHY. (Though its expenses are much larger as a percentage of assets - due to the small size - at about 5%). Am I missing something or is this a basically equivalent investment to MHY?

Steve

 

[Cardboard]

Bri-Chem is such a gift here it is not even funny.

 

It trades at $0.35 or below its net-net of $0.57/share and business is starting to boom for these guys. When you see more rigs, it means more fluid use. And when times were tough, drillers agressively reduced their inventories which means that there is pent-up demand on top of the new demand created from the additional rigs.

 

They have cut costs massively during the downturn while retaining all their distribution capacity. And the best thing is that they did not issue a single share of stock to get out of their trouble as so many oil & gas services peers have done.

 

Cardboard

[valcont]

Bri-Chem is such a gift here it is not even funny.

 

It trades at $0.35 or below its net-net of $0.57/share and business is starting to boom for these guys. When you see more rigs, it means more fluid use. And when times were tough, drillers agressively reduced their inventories which means that there is pent-up demand on top of the new demand created from the additional rigs.

 

They have cut costs massively during the downturn while retaining all their distribution capacity. And the best thing is that they did not issue a single share of stock to get out of their trouble as so many oil & gas services peers have done.

 

Cardboard

 

I saw this one earlier this year. That fulcrum debt looks ugly, $9m (almost their entire market cap) at 21%!! What gives you the confidence that they can pay up and grow in this oil market?

[Cardboard]

Confidence regarding the debt because they had $5.5 million available under their credit line on December 31 and the banks increased the line by $5 million subsequently to support their business. This along with fast improving cash flow provides an option to repay the Fulcrum debt in full or at least negotiate much better terms over coming months.

 

The bank line goes hand in hand with the value of receivables and inventories or higher business activity. With staffing and overhead remaining constant, it is not hard to envision higher profitability with much higher and growing volume.

 

Cardboard

[netnet]

 

I saw this one earlier this year. That fulcrum debt looks ugly, $9m (almost their entire market cap) at 21%!! What gives you the confidence that they can pay up and grow in this oil market?

Re the 21% ? Do you mean 11.5 annually, plus the 8.5 fee (hopefully one time only) for not paying the principal this past year.

 

Interesting company Cardboard. Basically a levered bet on North American drilling, which is not bad with a net-net (said Netnet  ;))

There is financing risk with the debt due this year however.

 

[valcont]

 

I saw this one earlier this year. That fulcrum debt looks ugly, $9m (almost their entire market cap) at 21%!! What gives you the confidence that they can pay up and grow in this oil market?

Re the 21% ? Do you mean 11.5 annually, plus the 8.5 fee (hopefully one time only) for not paying the principal this past year.

 

Interesting company Cardboard. Basically a levered bet on North American drilling, which is not bad with a net-net (said Netnet  ;))

There is financing risk with the debt due this year however.

 

Right. Principal deferred fee that has to be paid out on December,17 when the debt is due. So if you think they can refinance the debt , then the price will jump. Otherwise you have to have an opinion about drilling rig count and the spread between drilling cost and oil price to get an idea about their revenue.

[Cardboard]

To give you a flavour of what is to come, look at the turnaround in these results from a Canadian (only) service provider: coil rig operator (for completion), pumper and rental equipment.

 

https://www.stockwatch.com/News/Item.aspx?bid=Z-C%3aESN-2469266&symbol=ESN&region=C

 

These guys do not operate in the U.S. which has been very active in the Permian. You can actually closely monitor NA activity in every major area every Friday by going to the Baker Hughes website or the Rig Count. And these guys face labour shortage which is not the case for Bri-Chem. Moreover, they have to ramp-up some capex spending due to minimizing everything during the downturn which is less the case for Bri-Chem.

 

Results should be announced Thursday night or Friday morning.

 

Cardboard

[sculpin]

BRI-CHEM ANNOUNCES 2017 FIRST QUARTER RESULTS CONFERENCE CALL

 

Bri-Chem Corp. will hold its first quarter 2017 conference call to discuss Bri-Chem's results, outlook and related matters at 1 p.m. EDT on May 12, 2017. Details for the conference call are as follows:

 

Date:  May 12, 2017

 

Time:  11 a.m. MDT (1 p.m. EDT)

 

Conference call-in details:  1-800-273-9672 (for participants in North America)

 

[Cardboard]

After Aimia preferreds today  >:(. At least, this one seems to be working with a return to profitability:

 

http://www.stockwatch.com/News/Item.aspx?bid=Z-C%3aBRY-2470571&symbol=BRY&region=C

 

That is a 3.6 P/E annualized based on Q1 and today's close.

 

Cardboard

[clutch]

After Aimia preferreds today  >:(. At least, this one seems to be working with a return to profitability:

 

http://www.stockwatch.com/News/Item.aspx?bid=Z-C%3aBRY-2470571&symbol=BRY&region=C

 

That is a 3.6 P/E annualized based on Q1 and today's close.

 

Cardboard

 

Nice call, Cardboard. And thanks for the idea!

[Sunrider]

After Aimia preferreds today  >:(. At least, this one seems to be working with a return to profitability:

 

http://www.stockwatch.com/News/Item.aspx?bid=Z-C%3aBRY-2470571&symbol=BRY&region=C

 

That is a 3.6 P/E annualized based on Q1 and today's close.

 

Cardboard

 

Nice call, Cardboard. And thanks for the idea!

Indeed! Thank you.

 

(now we just have to keep an eye on those rig-count figures .... out of interest, is the spring/summer/falls time in the Canadian oil regions less busy because of the inability to get equipment into swampy areas, or is that not a major factor?)

C.

[Cardboard]

Q2 is typically the slowest quarter in Canada due to spring break-up which leads to road bans on dirt roads to move equipment around and drill sites that are too muddy. So the E&P companies also make their drilling plans and budget according to that.

 

However, they mentioned on their conference call today that the impact this year will be less than in previous years.

 

Cardboard

[maybe4less]

Q2 is typically the slowest quarter in Canada due to spring break-up which leads to road bans on dirt roads to move equipment around and drill sites that are too muddy. So the E&P companies also make their drilling plans and budget according to that.

 

However, they mentioned on their conference call today that the impact this year will be less than in previous years.

 

Cardboard

 

Any word on refinancing that debt?

[Cardboard]

Yes, they mentioned that they are looking at their options regarding Fulcrum and with spare availability on their credit line, positive cash flow and with more receivables/inventories, the credit line could likely grow.

 

They sounded very optimistic about it and I had the feeling they were about to accidentally disclose something.

 

Cardboard

[Hielko]

Somewhat speculative with multibagger potential, HemaCare (my write-up is here: https://alphavulture.com/2017/05/02/hemacare-deep-value-turning-into-growth-story/). Rapidly growing turnaround story. Lots of upside if they can continue on the current path.