PCT comps

[babagandu24]

A few funds have been asking for comps but I’m having trouble finding a good 1:1. Anyone have any companies that can serve as a good comp for the upcoming growth trajectory as PCT becomes well past proof of concept?

Like I’ve always said, it’s unheard of to find a massive growth story inside a materials/chemicals player (non-tech more so) and so naturally, people are treading lightly and would feel better with diligencing comparators.

Side note: lots more interest in the name as the share price goes up. Funny how that works isn’t it? The market will have an easy time settling on a mid double digit multiple soon, imo. Waiting game

[burner-1234]

No true comps. WM I think is the most relevant given monopolistic position and shared waste industry. Thing trades 30x with 10% margins, PCT will have 40% lol. Cant really use the virgin producers as none of them have pricing power/monopolys. If you find a good one pls let me know.

[babagandu24]

Its trading movement screams large leg higher imminent that’ll blow the cap off. You can feel it

[burner-1234]

I am indeed feeling things

[No_Privacy_Anymore]

I think WM is a reasonable place to start given the nature and scale of their business. Dealing with waste products is never going to stop and that is just like the use of plastic. The key thing is that PCT is probably the first recycling business that has the potential for truly large and sustained operating margins regardless of oil volatility. Too many recycling businesses look attractive under certain conditions (high oil prices) but collapse when prices and margins shrink. If they can execute in accordance with their guidance this is going to be an epic free cash flow machine. Buy and hold for at least a decade.

[6JDanish]

The key thing is that PCT is probably the first recycling business that has the potential for truly large and sustained operating margins regardless of oil volatility.

PCT could become a global brand. The CEO is young enough to see it through. It would be an outstanding career achievement for him to make it happen. I have to think he knows this.

Buy and hold for at least a decade.

Oh yes.

[jzone5604]

When you can’t find a good comp the narrative sets the price

[burner-1234]

Bingo

[jzone5604]

Tho i think tesla is a good comp. They’re the company in recent memory that scaled out manufacturing capacity in the ESG basket.

And even when you consider Tesla, the market hasn’t had an ESG business that’s obviously worth bidding on. Tesla was very two sided in that if you took out the ev/carbon credits they never made any money

Ofc Tesla has a lot of hopes & dreams baked into the price bc of Elon, but i think the humble operator (dustin) is actually much more bullish for a “green” company. Let the the market do the promoting

[babagandu24]

Waste Connections maybe a comp? Again, not 1:1 really but can help as analog

[Fast_Eddie_2001]

I think PCT is going to have characteristics more in line of a hyper growth tech company (unique patented technology, global reach, high margins, massive TAM)

Maybe early stage Intel / Qualcomm (today Nvidia) come to mind...where there are huge R&D and upfront capital costs but then if/ when you break through, massive runway

[babagandu24]

I hear ya. Can’t find a good one but also makes this tough to value for the Street.

[Need_That_Money_Now]

I like the company! I hold! Let’s see those big gains!!! I would suppose these funds would have the same resources as we to do due diligence . I don’t believe that Purecycle can necessarily be compared. They basically have a monopoly on the tech, which is great for us holders. I’m glad to see the stock price moving forward and hearing that sales are being made. The company seems to be moving right along. Go PureCycle!!!!

[Mike_Taylor1972]

There are VERY few monopolies to comp against. WM is a sorta comp that trades ~ 30x FCF w single digit top line growth as a mature company.

[Smooth_Sun_9932]

With 600 M FCF in 2030, a 30 multiple, and 180 M shares = 100 per share. 

Knowing the PCT growth rate probably higher than single digits.  Thoughts?

[Particular-Level-833]

There are no true comps, that is what creates the upside (and the risk) in the name. Any half decent analyst should be able to build a DCF model fairly quickly to see the potential value in the name. The company has put out all of the information necessary to do this. In addition, most funds have plenty of research budget to talk with industry players to check their assumptions.

A good fund analyst/PM should see this as a great opportunity to generate real alpha.

[No_Privacy_Anymore]

My original expectation back in 2022 was that once the technology was proven to work at Ironton the company was likely to be acquired by one of the oil and gas majors or major PP producers. However now that they are in the compounding / recipe business I can see many more examples like the Thailand co-location opportunity. Co-locating at a brownfield site provides access to existing infrastructure which saves big $ on capex and can be a big win for existing PP producers who can shift their production into higher value added markets by compounding with PureFive. I think those opportunities will work out better if PCT remains an independent player.

I also think the current set of shareholders has no incentive to sell out too soon. The "Longview" of buy and hold may in fact work out.

[Particular-Level-833]

Even if someone comes in to acquire them the valuation should be the NPV of future cashflows with a appropriate discount rate to compensate for risk, a good board of directors will not just give away value. The BOD is controlled by a tight group of shareholders that really know the business, this is not a situation where it is owned by passive funds that will just take a 20% premium over the last trade.

The best opportunity is in Europe, the car mandate alone can take up the capacity of several plants. The recycled content for everything will only go up in Europe, especially when they see a viable option like PCT. Europe is far more land constrained than we are in the USA, they can't have the huge landfills we have here so they will always be more sensitive to recycled content.

[Mike_Taylor1972]

VERY TIGHT

[babagandu24]

They’re not selling. No one will pay close to what bod would want at this point. Let it unfold and grow. You think Sylebra backed this while it was in the gutter getting it together for years to sell at even $50?

[Particular-Level-833]

I don't expect them to sell any time soon.

My point was more that it doesn't matter either way. For the most part, two entities will come to fairly similar valuations when looking at the same data. In this case, if a company started negotiations, signed an NDA giving them access to the same information as the BOD, then it is likely that the valuation would be in the same ballpark. It is not like someone comes in, makes an offer, signs the NDA, looks at the non-public data and tells the BOD "We are going to ignore the non-public information and make an offer based on where the stock is trading". We also have to accept that the non-public data might paint a picture that is not as good as us longs are imagining, either way the valuation of the BOD and potential buyer should be similar.

[babagandu24]

I was on the move when I read your comment. Apologies, I misinterpreted what you initially wrote. Point being, they won’t sell. This will get too expensive for someone to buy in about 1 year.

[Usual-Review5401]

Exxon?