Flowco Holdings And The Illusion Of Value

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.

The Mirandolan

A labour of love from a quantitative investment analyst and economist, offering rigorous global equity research and essays on the economics of risk. This publication is reserved for matters of genuine import, published on an irregular schedule only when research warrants. Its readership comprises analysts, portfolio managers, and capital allocators from leading institutional investment firms across the world.

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