Vertex Energy (VTNR), mcap=$1.3bn, price $18 vs $9

Pitch: Motor oil collector/recycler that has recently acquired a refinery from a forced seller SHEL and transformed itself into a bet on Renewable Diesel. The source of value creation comes from converting the refinery’s hydrocracker to produce RD. Trades at 2x EBITDA on the current crack spread – a material discount to peers. Off the radar of most investors given the recent closure of the acquisition and poor analyst coverage.

Valuation: VTNR Renewable Diesel business currently trades at 2.6x EV/EBITDA vs peers CLMT, REGI, and DAR range of 5.2x-9.3x. On a per-gallon basis it sits at $3.05/gl vs the peer range of $6.80-$12.51.

Exp. gain: +90-200% on comp valuations.

Full VTNR write-up (free guest account required):

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