Below is a note from Hedgeye CEO Keith McCullough on why we're adding Genesis Energy (GEL) to the short side of Investing Ideas today:
I've been waiting, patiently, for Oil to get back to the top-end of its risk range before sending you SELL signals on some of Kevin Kaiser's Best Ideas (see Institutional Research product for his entire list of ideas).
One of his better short ideas, Genesis Energy (GEL) recently reported - and this is part of what Kaiser wrote in an Institutional Research note:
"EPS – which we believe is the best measure of GEL’s economic profitability – was down 29% YoY in 1Q17. GEL’s 1Q17 CapEx was $61MM and FCF was $32MM or $0.27/unit. Net debt ticked down slightly to $3.0B due to a $140MM equity raise in March. Net debt to annualized 1Q17 EBITDA stands at 5.7x – the Company is still way over-levered."
This is another way to play our Reflation's Rollover Macro Theme.
