USD Partners LP is engaged in energy-related logistics assets which include rail terminals and other midstream infrastructure. The company operates its business through two reportable segments Terminalling Services and Fleet Services. The Terminalling Services segment operates Hardisty and Casper terminal where Hardisty loads various crude oil and Casper terminal is engaged in storage and blending of crude oil and the Fleet Services segment provides railcar services; and fleet services related to the transportation of liquid hydrocarbons and biofuels. The group operates its business primarily through the United States and Canada and generates a majority of its revenue from the Terminalling services.This week, I fundamentally analyze USD Partners’ stock. I review USDP’s operating segments, look at its key ratios, and derive the intrinsic value using Discounted Cash Flow (DCF) analysis. Since this is a long video, please feel free to use the time stamps in the video if you only wish to watch certain topics.
I review various key ratios such as Revenue, Net Income, Shares outstanding, Dividends, Payout Ratio, Free Cash Flows (FCF), Financial Leverage, Current Ratio, Debt to Equity Ratio, Return on Equity (ROE), Days Sales Outstanding (DSO), Days Inventory, Payable Period, Cash Conversion Cycle, Inventory Turnover, etc.
After taking into account USDP’s 2020 free cash flow of $45 million figure, a 3% growth rate of FCF (growth for the next 10 years), 15% discount rate, 1.9% long term growth rate (growth from 10 year mark to perpetuity), 27 million shares outstanding, and $195 million of long term debt, the DCF analysis yields us an intrinsic value of $6.19 per share.
0:31 Annual Report – Business, Operating Segments
7:19 Key Ratios Analysis
15:13 Discounted Cash Flow Analysis / Intrinsic Value
USD Partners’ Website: here.
Morningstar Key Ratios Link: here.
Useful Resources here.
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