The recovery in the U.S. onshore oil & gas sector has been a significant catalyst for MRC Global (MRC),
the world’s largest distributor of pipes, valves, and fittings (or PVF)
and other equipment to the energy sector. With the shares up almost 70%
over the past three years, the stock has easily outperformed fellow
distributor NOW (DNOW),
as well as the broader oil/gas services and equipment sector. The
performance over the past year hasn’t been as strong, though, with NOW
handily outperforming MRC Global, which I believe is due in part to
greater upstream leverage.
It would appear that
there is still upside in MRC shares, as the company benefits from
ongoing revenue re-acceleration and improving margin leverage. I do
expect the growth drivers to transition more toward the midstream and
downstream businesses in the coming years, but I believe there is value
here up into the low-to-mid $20’s.
Read the full article here:
MRC Global Leveraging Renewed Energy Capex Investments, But Looks Undervalued
