Vistra Energy’s CEO rejoins The Stock Podcast to provide an update on the VST stock thesis. It’s always a pleasure to have Curt on the program to talk about his company and provide updates on the investment story. VST is one of my personal favorite investment ideas and Curt does a fantastic job of highlighting the key elements of the investment thesis. If you’d like to tune in to the first interview with Curt, click here!
Retail Electricity
Nathan Kroeker is the President and CEO of Spark Energy (SPKE). Tune in to hear Nathan describe Spark Energy’s business model and why he thinks SPKE stock is undervalued. Nathan also shares his thoughts on the outlook for the industry, and an explanation as to why the retail energy services business is misunderstood by the broader market. Most importantly, he outlines the most important aspects of the SPKE investment story and highlights the key elements of a really compelling investment idea.
Spark went public in 2014 and was largely considered a roll-up story. Retail electricity businesses were trading really low multiples. So, SPKE could use its public currency, which carried a higher multiple, to roll-up private retail business at lower multiples. Recently, however, Nathan Kroeker shifted the company’s priorities to organic growth, and to optimize the business. Management expects to achieve 20M in cost savings from some discrete integration initiatives, which is a big deal for a company that generates less than $100M in EBITDA. Cash flows could grow meaningfully next year for Spark, especially since earn-out payments from previous acquisitions will be completed by mid-2019.