World Kinect Corp (WKC, Financial) has recently caught the attention of investors with its notable stock performance. The company's market capitalization stands at $1.52 billion, with a current stock price of $25.27. Over the past week, WKC experienced a slight dip of 2.41%, yet this short-term loss is overshadowed by a significant 13.70% gain over the past three months. According to GuruFocus's valuation methods, the stock is currently significantly undervalued, with a GF Value of $40.6, up from the past GF Value of $38.42. This suggests a potential upside for investors, as the stock's market price is well below its intrinsic value.
Understanding World Kinect Corp
World Kinect Corp operates within the dynamic oil & gas industry, providing a suite of services including energy management, supply fulfillment, and advisory services. The company's global reach in delivering liquid fuels, natural gas, electricity, and renewable energy solutions positions it as a key player in the energy sector. With a focus on transaction and payment management solutions, WKC serves a diverse clientele, aiming to streamline energy procurement and sustainability efforts for commercial and industrial customers worldwide.
Profitability Analysis
WKC's financial health is reflected in its Profitability Rank of 7/10, indicating a strong position relative to its peers. The company's Operating Margin of 0.59% surpasses 27.17% of the industry, showcasing efficient management. Additionally, WKC's Return on Equity (ROE) of 5.50%, Return on Assets (ROA) of 1.43%, and Return on Invested Capital (ROIC) of 6.38% all outperform a significant portion of the industry, suggesting a robust ability to generate profits from its equity, assets, and investments. With nine years of profitability over the past decade, WKC demonstrates a consistent track record of financial success.
Growth Prospects
WKC's growth trajectory is captured by its Growth Rank of 6/10. The company has achieved a 19.40% 3-Year Revenue Growth Rate per Share, outpacing 66.94% of the industry. Its 5-Year Revenue Growth Rate per Share stands at 6.30%, which is also higher than 51.59% of its industry counterparts. However, the 3-Year EPS without NRI Growth Rate shows a decline of 14.60%, which, while negative, still fares better than 17.8% of the industry. This mixed growth performance indicates areas of strength as well as opportunities for improvement.
Investor Confidence
Notable investors have taken significant positions in WKC, demonstrating confidence in the company's prospects. Charles Brandes (Trades, Portfolio) holds the largest share with 2,520,778 shares, representing 4.19% of the company. HOTCHKIS & WILEY and Chuck Royce (Trades, Portfolio) also maintain substantial stakes, with 400,191 shares (0.66%) and 112,613 shares (0.19%), respectively. These investments by seasoned investors may signal a positive outlook for WKC's future performance.
Competitive Landscape
When compared to its competitors, WKC holds its ground with a market cap of $1.52 billion. Delek US Holdings Inc (DK, Financial) has a slightly higher market cap of $1.77 billion, while CrossAmerica Partners LP (CAPL, Financial) and Delek Logistics Partners LP (DKL, Financial) have market caps of $834.595 million and $2 billion, respectively. This places WKC within a competitive range of its peers, suggesting that it is well-positioned within the industry.
Conclusion
In summary, World Kinect Corp's stock performance and valuation indicate a company that is significantly undervalued, with a strong potential for growth. Its profitability metrics are commendable, particularly when compared to industry standards. The company's growth rates, especially in revenue per share, are robust, although its EPS growth rate suggests some areas for improvement. The confidence shown by major shareholders further bolsters the positive outlook for WKC. Finally, when juxtaposed with its competitors, WKC's market cap suggests it is a competitive player in the oil & gas industry. For value investors seeking opportunities, WKC presents an intriguing option with its current undervaluation and promising financial indicators.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
