Flint didn’t have a great year. They had some non-recurring expenses and tough comps in some of their segments.
I originally bought FES.TO right around these levels in 2010. When the price rose dramatically faster than the fundamentals, I sold out. Now the opposite has happened. Flint has had its share price lose 30% YTD and the fundamentals of the company seem to be improving over the last 2 quarters.
They had a pretty major oil sands contract awarded (at $430 million). They also made a strategic acquisition that was funded partially by shares. The issue was that FES was actually quite cheap, so I would have preferred if they used all debt instead.
According to analysts Flint should do $200 mil in EBITDA and $1.65 EPS in 2012. That’s gives you a EV/EBITDA of 3.6x and a 7.4 P/E. Though I don’t like to rely too much on future estimates, I take comfort in the fact that right now you can buy FES.TO at 1.1x tangible book. With earnings trends pointed in the right direction and increased expenditures from the major oil sands players, I can live with expensive ttm numbers for Flint. Oil seems to be stable even during the Euro-crisis.
Living in Alberta, I can tell you that nobody really knows about the crisis in Europe and it doesn’t seem to be affecting the energy sector one bit. As long as oil stays above $75, we are in expansion mode here.
Under $13 I think Flint is a buy. I promise to have more detailed posts than this one going forward.
Disclosure: The author is long FES.TO