Terra Energy Resources, Ltd. engages in the process of polymer based recycling and reformation activities. The company produces and sells various kinds of oil based polymer materials to manufacturers for re-use. It serves food, maritime, auto, and construction industries. The company was formerly known as Terra Media, Ltd. and changed its name to Terra Energy Resources, Ltd. in June 2008. Terra Energy Resources, Ltd. is headquartered in New York, New York.

Terra Energy Resources, Ltd.

Real Estate

The company does not pay dividends at all, or it pays them sporadically. There have only been a few years with dividend payments in the past ten years. 

TRRE reported revenue of USD 0mn in the last 12 months, down 51% from FY22. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS grew 103% from FY22 to USD -0.01.

The stock's performance has been mixed in the past six months, with growth following a decline. The stock has lagged its global peers from the same sector and industry (as shown above), underperforming then by 60ppts in total. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is slightly negative.

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 0.3 in the past several years. This ratio implies a weak shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

TRRE has very poor trading liquidity. It will take considerable time for the average private investor to sell a common position under normal market conditions. Liquidity is very unstable and becomes extremely unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. Another factor to consider is the substantial number of days with zero trading volumes, i.e., without any ability to sell a position. The stock has a tiny market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is very high. Among the negative credit factors, we point to slow historical revenue growth, bleak profitability, negligible return on capital, poor working capital management, inadequate interest coverage, poor cash flow generation, and an unfavourable capital structure.

In highly turbulent market conditions, TRRE is exceptionally volatile. In other words, the stock will be among the worst-performers in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be critical. 

In normal market circumstances, TRRE is exceptionally volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change quite unpredictably. The stock's losses on its worst days (less than 1-5% of the time) will range from critical to immense. 

From both historical and forecast perspectives, the stock is fairly priced compared to similar stocks. In particular, the stock is undervalued on P/FCF. 

Terra Energy Resources, Ltd.

$ 0.02

2

Terra Energy Resources, Ltd.

$ 0.02

2

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

$ 0.02

About

About

About

About