I recently published an investment thesis exclusive to the investment platform, Seeking Alpha, where I will be covering recent and forthcoming initial public offerings (IPOs). The article is on Flowco Holdings Inc. (FLOC). From the executive summary of the article is the following:
- Flowco appears cheap on P/E but is in a phase of the capital cycle defined by deteriorating ROIC, with no clear turnaround catalyst.
- Material weaknesses in internal controls and questionable executive compensation practices undermine trust in financial reporting and management alignment.
- The Up-C structure and noncontrolling interests siphon most economic benefits away from public shareholders, with dilution risks compounding the problem.
- Despite theoretical upside in optimistic scenarios, the risk of total capital loss makes Flowco a gamble, not an investment—Strong Sell rating assigned
The rest of the article is available here.