Author Topic: DNOW - DistributionNow  (Read 84532 times)

AzCactus

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Re: DNOW - DistributionNow
« Reply #180 on: March 27, 2017, 11:44:08 AM »
Is this from Arlington's 2016 letter ?  If so would you mind attaching a copy ?


winjitsu

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Re: DNOW - DistributionNow
« Reply #181 on: March 27, 2017, 05:30:30 PM »
Is this from Arlington's 2016 letter ?  If so would you mind attaching a copy ?

http://www.valuewalk.com/2017/03/allan-mecham-2016-letter/?all=1

AzCactus

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Re: DNOW - DistributionNow
« Reply #182 on: March 28, 2017, 11:14:40 AM »
Thank You

AzCactus

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Re: DNOW - DistributionNow
« Reply #183 on: August 02, 2017, 10:41:47 AM »
To me this company is starting to look interesting again. Year over year numbers are up significantly in most regards.  They had a very small loss and appear to have a management team that is keeping expenses relatively low.  The only negative I saw was the debt go up year over year.  Anyone see anything else of significance?

Foreign Tuffett

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Re: DNOW - DistributionNow
« Reply #184 on: August 03, 2017, 04:29:06 AM »
To me this company is starting to look interesting again. Year over year numbers are up significantly in most regards.  They had a very small loss and appear to have a management team that is keeping expenses relatively low.  The only negative I saw was the debt go up year over year.  Anyone see anything else of significance?

Here are some very, very general thoughts. Please note that I don't follow DNOW closely, but in a past life I worked in the oilfield services industry and have a tiny sliver of experience dealing with them.

The original thesis was that DNOW, as comparatively large industrial distributor in the fragmented oilfield distribution space, could grow its market share by rolling up mom and pops. Pete Miller leaving NOV to become DNOW's Executive Chairman was also seen as a big plus. Combine all that with a net cash position and a capital light business model and what's not to love? 

Obviously the thesis hasn't worked particularly well. DNOW, being very leveraged to the US onshore upstream E&P space, particularly well completion activity, was at or near peak earnings at the time of the spinoff (note that the price of WTI oil at the time of the spinoff was ~$100). They spent the first couple of years post-spinoff consistently shrinking and consistently generating negative EBITDA. One easy way to get an idea of the extent to which DNOW has shrunk is to compare their balance sheet as of yesterday's 10-Q to their balance sheet as of their first post-spinoff 10-Q. Look specifically at current assets vs total liabilities.

Moving forward I think the main driver for the company is what I mentioned above: US onshore E&P activity, particularly well completions. This is why the company is always talking about tank batteries, well completion backlogs, and rig counts. It's hard to have an opinion on these things without having an opinion on future WTI prices and shale basin E&P activity, two things that IMO are very difficult to forecast, even directionally.   








WneverLOSE

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Re: DNOW - DistributionNow
« Reply #185 on: August 03, 2017, 06:25:59 AM »
Another thing is that I think people expected (and still expect) that when a recovery comes they could lever up and produce nice returns on equity but it doesn't look that it will ever happen, I agree with Robert Workman that the cycles will be more frequent and more extreme so taking leverage will be much more risky than once thought.

MrB

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Re: DNOW - DistributionNow
« Reply #186 on: August 03, 2017, 01:56:23 PM »
To me this company is starting to look interesting again. Year over year numbers are up significantly in most regards.  They had a very small loss and appear to have a management team that is keeping expenses relatively low.  The only negative I saw was the debt go up year over year.  Anyone see anything else of significance?

Here are some very, very general thoughts. Please note that I don't follow DNOW closely, but in a past life I worked in the oilfield services industry and have a tiny sliver of experience dealing with them.

The original thesis was that DNOW, as comparatively large industrial distributor in the fragmented oilfield distribution space, could grow its market share by rolling up mom and pops. Pete Miller leaving NOV to become DNOW's Executive Chairman was also seen as a big plus. Combine all that with a net cash position and a capital light business model and what's not to love? 

Obviously the thesis hasn't worked particularly well. DNOW, being very leveraged to the US onshore upstream E&P space, particularly well completion activity, was at or near peak earnings at the time of the spinoff (note that the price of WTI oil at the time of the spinoff was ~$100). They spent the first couple of years post-spinoff consistently shrinking and consistently generating negative EBITDA. One easy way to get an idea of the extent to which DNOW has shrunk is to compare their balance sheet as of yesterday's 10-Q to their balance sheet as of their first post-spinoff 10-Q. Look specifically at current assets vs total liabilities.

Moving forward I think the main driver for the company is what I mentioned above: US onshore E&P activity, particularly well completions. This is why the company is always talking about tank batteries, well completion backlogs, and rig counts. It's hard to have an opinion on these things without having an opinion on future WTI prices and shale basin E&P activity, two things that IMO are very difficult to forecast, even directionally.

That's reasonable, but I think it is fair to say that Workman faced the most severe downturn in living memory.

Foreign Tuffett

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Re: DNOW - DistributionNow
« Reply #187 on: August 03, 2017, 09:58:52 PM »

That's reasonable, but I think it is fair to say that Workman faced the most severe downturn in living memory.

Yes, very true.

MrB

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Re: DNOW - DistributionNow
« Reply #188 on: May 02, 2018, 07:13:31 AM »
About time we have something to smile about.
Q1 - Revenue was $764 million for the first quarter of 2018, up 21 percent year over year and up 14 percent sequentially.

http://ir.distributionnow.com/news-releases/news-release-details/now-inc-reports-first-quarter-2018-results
« Last Edit: May 04, 2018, 06:03:07 AM by MrB »

MrB

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Re: DNOW - DistributionNow
« Reply #189 on: November 01, 2018, 09:38:49 AM »
Closing the gap with MRC; DNOW sales up 18% v MRC 12% - Looks like project solutions and the tank business is actually working out...finally

http://ir.distributionnow.com/news-releases/news-release-details/now-inc-reports-third-quarter-2018-results
http://ir.distributionnow.com/static-files/4e1d3eb8-e2d0-4b62-9834-9376e52787d5