SXL Time to Accumulate, page-257

not a fair comparison on p/e’s. would you rather have a stock on 9x p/e with no debt or a stock on 9x with lots of debt.
the answer should be obvious. Lots of debt adds risk, cost (of financing) and means a lot less of the earnings stream is ‘owned’ by equity holders, because bond or debt suppliers have a (prior) claim on the company and its earnings.

sxl had loads of debt and now has very little (net) debt. It’s earnings deserve a higher multiple. I believe it should trade on 12-14x unleveraged earnings. I also believe with cost cutting undertaken earnings will hit a higher high. $2.50 very achievable and should be higher in my view for optionality offered by a now really strong balance sheet. When the growth stock bubble bursts as it will soon IMO, this will fly