Q: What is your assessment of TWM's results and future prospects.
5i Research Answer:
TWM operates as a small-cap oil and gas producer, and is trading at 3.7x Forward P/E. In Q1-2024, TWM reported $39.8M in EBITDA, a decline from last year of $48.9M. Over the last few years, TWM reinvested heavily back into growth by leveraging the balance sheet. The net debt/EBITDA is currently around 7.0x which we think is extremely high for a cyclical business. Although TWM is currently cutting capex meaningfully, we think the debt level is still too high, we would not comfortable owning a highly leveraged, illiquid small-cap energy name.