Investors,

Sometimes the ugliest most hairiest stocks are the ones with the most upside. Companies with entrenched management teams. Terrible capital allocators. A melting ice cube that is burning valuable shareholder value. Companies trading at decade long lows because investors have completely given up.

The company I am highlighting today fits all of the former. The management team has failed at capital allocation. The stock is trading at a multi-decade low. Investors have seemed to completely given up.

Despite the massive ball of hair surrounding the stock, there may be one last puff from this blood soaked cigar. This company is energy asset heavy. And the oil and gas industry is now one of the hottest sectors. In addition, there are over $400 million in accounts receivable that could get collected over the next 12 months. With an enterprise value under $200 million, a collection of these receivables could result in a significant re-rating of the valuation.

This newsletter won’t be an in-depth discussion on the business model of this stock. I have only allocated around 1% of my portfolio to this asset and I probably will not increase it unless something significant takes place. The newsletter will be more of a discussion of the assets and what could happen over the next 12-18 months.

I hope you enjoy the newsletter and have a great weekend

- Anon