LFG - Archaea Energy - Deep Value play
$Archaea Energy(LFG.US$
De-spac Play (M&A closed: 9/15/21) currently undervalued
De-spac Play (M&A closed: 9/15/21) currently undervalued
LFG is the Leading Renewable Natural Gas (RNG) Company through the simultaneous merger of Aria Energy and Archaea Energy
Sector Opportunity:Natural Gas has seen a major price increase based on Hurricane Ida, up 80% YTD and 31% last month; LFG is tracking that performance up 79% YTD and 32% last month; Goldman thinks the price of Natural Gas could double and recently invested $40M
Revenue:$204M, growing at 38% CAGR; 2x better than the competitors
Profitability:Day 1 profitable $40M in ‘20; In ’21, $65M, 38% margin; 10x EBITDA growth in 5 years; 3x better than the competitors
Valuation:Trading at ~16x 2022 EV/EBITDA, Comps trading at 31x; Implies the stock is currently undervalued and could double
Analyst coverage:PT $32 based on Ortex data, implies a 66% upside
Institutions:Very high Ownership Accumulation Score on fintel, (Ranked 93 out of 21,606 companies); 72 Institutional Investors; Goldman recently invested $40M
Stock:Up 30% in the last month; 100% upside based on comps: PT $40 Thinly traded stock with no shares to borrow, major volume spike could really drive price higher
Catalysts:Natural gas price increases, Initiation reports from more established banks, continued institution buying,
$National Fuel Gas(NFG.US$ $Ultrapar Participacoes(UGP.US$ $Atmos Energy(ATO.US$
$National Fuel Gas(NFG.US$ $Ultrapar Participacoes(UGP.US$ $Atmos Energy(ATO.US$
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