Daily Brief Energy/Materials: Reliance Industries, Mount Gibson Iron, Propetro Holding, Balchem Corp, Empire Energy, Talos Energy Inc, Lithium Power International, Louisiana Pacific, Silgan Holdings, Alamos Gold and more

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Reliance Industries

• Mount Gibson Iron (MGX AU) is a pure play on iron ore trading at 0.5x EV-EBITDA, with 77% of the market capitalization in cash in H1 FY24 (likely to grow).
• The company is about to announce reinstating its dividend, and a 50% payout could result in a yield of 20% on the current share price. 
• The company’s main catalyst is its earnings release in August, after which a board meeting will decide on future dividends (which it has already committed to shareholders). 

• ProPetro has seen significant improvements in fundamentals over the past year, making it a more attractive investment opportunity
• Focus on downhole pumping services has allowed ProPetro to expand services and acquire new revenue streams
• Falling CAPEX, stable demand, clean balance sheet, and new capital allocation strategy centered around significant buybacks position ProPetro for growth

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Balchem Corporation’s sales in fourth quarter 2023 were marked by a slight dip, but the company still posted record operating earnings and free cash flow.
• It also achieved record fourth-quarter sales and earnings in the Human Nutrition & Health segment.
• Going back a bit, full year 2023 sales were down 2.1%, yet operational earnings recorded an increase of 9.6%.

• Empire Energy Group Limited (ASX:EEG) is an oil and gas producer/developer, with onshore Northern Territory (NT) gas exploration and development assets.
• EEG has the largest tenement position in the highly prospective Greater McArthur Basin, which includes the Beetaloo Sub-basin.
• Following the recent announcement of the divestment of its US assets for up to $9.1m, EEG has successfully completed a further capital raising through a placement of shares and sale of royalty interests to generate some $46.8m.

• 1Q24 results will include roughly one month of contribution from the assets acquired in the QuarterNorth transaction, which closed on March 4, 2024.
• The QuarterNorth acquisition added an oil-weighted (~75% oil production) asset base (>95% operated), bolstering Talos’s position in the Mississippi Canyon and Green Canyon areas offshore in the Gulf of Mexico.
• Management expects to realize $50 million of estimated annual run-rate cost synergies by year-end 2024.

Edison Investment Research is terminating coverage on ABC Arbitrage (ABCA), paragon (PGN), Foresight Solar Fund (FSFL), Kendrion (KENDR), Lithium Power International (LPI), Triple Point Energy Transition (TENT), 4iG (4IG), e-therapeutics (ETX), Pharnext (ALPHA) and Shield Therapeutics (STX). Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant. Previously published reports can still be accessed via our website.

• Louisiana-Pacific Corporation (LP) emerged from 2023 with a much stronger finish than its beginning due to the impressive performance of its Siding business segment in the fourth quarter, which recorded the highest EBITDA margin of the year.
• LP managed to return to normal inventory and order flows after experiencing a destocking cycle in the first half of the year.
• The company ended the year with $222 million in cash and over $770 million in liquidity, demonstrating its strong financial position despite its significant investment in SmartSide and ExpertFinish capacity.

• The fourth quarter 2023 earnings exhibited Silgan Holdings, a leading manufacturer of consumer packaging goods, as a resilient company able to navigate amidst adverse economic circumstances.
• The company’s resilience was evidenced by its strong performance during the period, marked by the second-highest adjusted Earnings Per Share (EPS) and adjusted EBIT in its history.
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• Alamos Gold Inc.’s fourth-quarter 2023 results unveiled that the year yielded strong results on multiple fronts, with some of the best performance figures in two decades.
• The company achieved a significant 15% increase in the production reaching a record 529,000 ounces of gold, at the top end of their raised production guidance.
• Operational costs reduced by 4% while revenue saw an impressive increase of 25% to a record $1 billion.