CEO Interview: Misunderstood, Rapidly Growing Energy Infrastructure & OFS Company

CEO outlines why he expects substantial market growth, explains the key drivers, and shares his view on the company’s valuation and why it's aggressively buying back stock.

In my recent article, “Stable Cash Flows (Mis)Priced as Cyclical,” I discussed a rapidly growing gas-infrastructure company that is benefitting from the surge in natural gas demand driven by LNG export growth and AI-related power expansion. This company is already seeing clear evidence of this trend: its flagship business division has built a record backlog of sales orders, driven by strong customer demand for the natural-gas equipment that the company manufactures.

The free cash flow from this segment alone equates to nearly a 10% yield at today’s valuation, notwithstanding the further growth that’s expected ahead.

At the same time, the company also operates a second major division that is currently in a deep cyclical downturn, and the market appears overly focused on this weaker segment, which is weighing down the stock. But in my view, the combination of this temporarily depressed business line and the accelerating growth of the gas-infrastructure division creates a setup for significant upside as the cycle turns.

I recently had the opportunity to interview the company’s Chief Executive Officer, who has led the business since it debuted at $0.10 per share nearly 30 years ago and now trades above $10 per share. In our conversation, he provides a detailed look at both business divisions, how he is thinking about their trajectories going forward, and why his company is aggressively buying back stock in light of these dynamics.

The full interview is available below, including a full transcript.