Steve Gorelik
Person
Steve Gorelik is a fund manager at Firebird Management, an investment firm. He is known for developing and presenting investment theses on publicly traded companies.
What Steve Gorelik has said on podcasts
19 statements
DNow’s acquisition-led distribution model can produce efficient growth and strong returns on capital.
“And as a result of that, you get a fairly good, efficient growth and returns on capital.”
Open the episode · $DNOW: the boring distributor that could double on 2029 numbers | Firebird ManagementListen at 5:30
DNow’s oil-and-gas market may be stabilizing or beginning to grow.
“But I think there is something that's happening here.”
Open the episode · $DNOW: the boring distributor that could double on 2029 numbers | Firebird ManagementListen at 9:01
Rising U.S. rig counts are helping DNow.
“So like in US, we're talking about the rate counts. Right now, I think we're around something 590. We started six months ago, we were at 530. So we're already seeing about a 10% increase in number of rigs in the United States, which is actually helping companies like Dinao.”
Open the episode · $DNOW: the boring distributor that could double on 2029 numbers | Firebird ManagementListen at 12:46
DNow’s recent growth may be only the beginning.
“But I think it's just the beginning of what we could be seeing from this company.”
Open the episode · $DNOW: the boring distributor that could double on 2029 numbers | Firebird ManagementListen at 13:09
DNow increased margins and profitability despite declining oil-and-gas investment.
“But even without it, I think this is a company that has shown, and if you look at their results kind of like within the last five years or so, in the environment in which the oil and gas investment has been declining, they still managed to do pretty well. And they still managed to increase their profit margins. They still managed to increase their profitability as well.”
Open the episode · $DNOW: the boring distributor that could double on 2029 numbers | Firebird ManagementListen at 16:54
DNow’s projections for next year are likely conservative.
“I do think that they're being very conservative about the projections for next year”
Open the episode · $DNOW: the boring distributor that could double on 2029 numbers | Firebird ManagementListen at 26:00
DNow and MRC should earn more as demand improves.
“if you would ask just the question of, should these companies be making more money or less money? I think the answer should be more”
Open the episode · $DNOW: the boring distributor that could double on 2029 numbers | Firebird ManagementListen at 26:34
DNow historically traded around a 5–6% free-cash-flow yield.
“historically, this number was quite volatile, but it averages out that on average for DNow, the market was willing to pay about 5% to 6% free cash flow.”
Open the episode · $DNOW: the boring distributor that could double on 2029 numbers | Firebird ManagementListen at 29:26
DNow’s 2027 free-cash-flow yield is approximately 10% at today’s price.
“So that means on 2027, today you're getting about a 10% free cash flow yield.”
Open the episode · $DNOW: the boring distributor that could double on 2029 numbers | Firebird ManagementListen at 31:07
DNow’s projected EBITDA level should be relatively easy to achieve.
“Yes, and that is on the EBITDA number that I would argue there should be relatively easy to achieve for them.”
Open the episode · $DNOW: the boring distributor that could double on 2029 numbers | Firebird ManagementListen at 32:08
DNow’s 3–5% annual growth deserves a higher valuation multiple.
“And once you have that, that does deserve a higher wealth.”
Open the episode · $DNOW: the boring distributor that could double on 2029 numbers | Firebird ManagementListen at 35:03
DNow has historically timed share repurchases effectively.
“So they've been opportunistic and historically have shown to be pretty smart about when they're buying back shares.”
Open the episode · $DNOW: the boring distributor that could double on 2029 numbers | Firebird ManagementListen at 36:52
DNow’s macro backdrop and experienced management create multiple ways to win.
“But I think given the macro background switching from a headwind to a tailwind, and the people who are involved here with David Cherishinsky being there, he's been at Dino for I think over 25 years and has a pretty good history of prior acquisitions that they've made in the past. You're getting into a situation in which there's a few ways to win from here.”
Open the episode · $DNOW: the boring distributor that could double on 2029 numbers | Firebird ManagementListen at 39:32
The combined DNow-MRC distribution business has less than 20% market share.
“but I know that it's below 20%.”
Open the episode · $DNOW: the boring distributor that could double on 2029 numbers | Firebird ManagementListen at 40:55
DNow could reach approximately $30–$32 per share by 2028–2029.
“you can get to about 30, $32 per share.”
Open the episode · $DNOW: the boring distributor that could double on 2029 numbers | Firebird ManagementListen at 41:24
DNow should remain public only if public status lowers its cost of capital.
“if the being public lowers its cost of capital, then yes. But if it does not, then maybe this is a given how volatile the business they're in, maybe it should be private.”
Open the episode · $DNOW: the boring distributor that could double on 2029 numbers | Firebird ManagementListen at 41:32
Private equity is unlikely to pursue a highly levered DNow in a shrinking market.
“So I don't think people want to touch that.”
Open the episode · $DNOW: the boring distributor that could double on 2029 numbers | Firebird ManagementListen at 43:20
DNow could benefit from investment in utilities, refineries, and data centers.
“could be in all the right places if we're going to see the type of investment that is being talked about in utilities and refineries and data centers, et cetera.”
Open the episode · $DNOW: the boring distributor that could double on 2029 numbers | Firebird ManagementListen at 44:34
Low-margin distribution markets discourage new competitors from entering.
“So your natural level of competition of people, I don't think you're going to have a lot of people saying that, oh, I want to build a new Dino.”
Open the episode · $DNOW: the boring distributor that could double on 2029 numbers | Firebird ManagementListen at 46:09
Statements are attributed to the speaker as said on the episode and reflect their view at the time, not PodLume's. They are not advice.
