ChampionX Reports good Q4 2020 Results

ChampionX Reports good Q4 2020 Results

ChampionX (CHX) reported a great quarter yesterday, and the stock has rallied sharply. The most important factor for me is free cash flow, and the company generated $115MM in the quarter (adjusting for acquisition related expenses) or $460MM on an annualized basis. Even with the run up in its stock price, ChampionX is still only trading at 9.2x free cash flow. Very cheap considering oil is back above $60/bbl. Pre-merger with ChampionX, Apergy traded at ~20x free cash flow. Not sure if we get all the way back, but I think there’s more upside to the stock. The chart looks great as well. My midterm price target is $26, but I think the stock could easily trade in the mid $30’s within the next year or so.