ENB - CES Energy Solutions: Strong Growth May Not Return Until 2020
Investment Thesis
CES Energy Solutions (CESDF) ((TSX:CEU.TO)) delivered mixed Q4 2018 results. While the company saw its revenue increased by 25%, its gross margin compressed by about 4 percentage points primarily due to challenging outlook in Canada. Looking forward, we believe its sales growth may not re-accelerate until late 2019 or even 2020 due to lack of takeaway pipeline capacities in Alberta and Permian Basin. Although its shares are currently trading at a discount to its historical average, investors may want to wait on the sideline or only add shares on further price