MNTK - Montauk Ag To Provide A Multi-Year Earnings Compounding Opportunity

2024-07-11 11:20:10 ET

Summary

• Regulatory changes and industry trends are expected to drive growth in the anaerobic digestion market, with Montauk poised to capture a significant share.
• The company is well-positioned to capitalize on the growing anaerobic digestion industry, particularly in the dairy and swine RNG sectors.
• Against recent take-private valuations, I view the current Montauk EV of c$800m and EV/EBITDA multiple of c8x as significantly undervaluing the business and share price.

Editor's note: Seeking Alpha is proud to welcome Adriaan Basson as a new contributing analyst. You can become one too! Share your best investment idea by submitting your article for review to our editors. Get published, earn money, and unlock exclusive SA Premium access. Click here to find out more »

Introduction

Montauk (MTNK) is currently trading at $5.19 (as of July 10th).

I believe the market is mispricing the agricultural opportunity and other new business developments that have been announced by the company over the past 12 months. Montauk's current development pipeline, its continued expansion into the anaerobic digestion ("AD") industry and recent take-private transactions justifies a valuation above the current market price....

For further details see: