MCW Energy Stock Analysis

Let’s take a look at a company in the energy space that may represent a solid investment opportunity.

MCW Energy Group (Frankfurt: MW4) is an established energy company whose shares are now trading on the Frankfurt Exchange. The company participates in the highly lucrative energy sector and is positioning itself for long term growth. This is part of a paid, but independent Research Series on MCW Energy Group. I support the views and opinions expressed in this Series. I do not own any MCW Energy Group Securities. Please review the Disclosure Policy .

MCW History

MCW is a Canadian holding company with operations and distribution facilities in California. MCW Energy is not a fly-by-night operation. The company, founded in 1938, has been in business for nearly 75 years. MCW seeks to grow beyond its distribution business and expand into oil sand exploration and production.

MCW Energy Group distributes a large amount of branded and unbranded gasoline in the Western portion of the United States through its subsidiary, McWhirter Distributing Company. drupal statistics

One of the many positive things about the MCW Energy Group is that they are a profitable company. McWhirter Distributing produced sales revenue of nearly $189 million dollars and the company reported a $2.7 million dollar operating profit. While the distribution business is relatively low margin, MCW hopes to gain a competitive pricing advantage via its oil sand recovery operation.

Energy Industry Outlook

As any smart investor knows the oil industry is a great area to invest in right now. Oil is trading for over $100 a barrel and gas prices are near $4 a gallon. Oil prices are expected to continue their upward rise as global economies continue to improve.

The rise in oil price should benefit any company that is able to harvest oil cheaply. The cost of oil production for MCW ranges from $18 to $20 per barrel. The company should have incredible profit margins so long as oil prices remain high.

The future continues to look bright for the oil industry as demand is expected to increase due to population growth in countries like China and India. The United States dependence on oil is still very high. Tensions in the Middle East have also led to supply concerns, making regional oil production a preferred alternative.

MCW is forecasting high double digit annual growth rates as the company expects to benefit from the growth of its core fuel distribution business and the ramping up of its production operation.

In the alternative energy space, MCW participates in the California Fuel Cell Partnership Program. This partnership focuses on finding sustainable energy sources and promoting the use of vehicles that rely on fuel cells.

Investors should take a closer look at this energy company that has the opportunity to benefit from both traditional and future energy sources.

This is part of a paid, but independent Research Series on MCW Energy Group. I support the views and opinions expressed in this Series. I do not own any MCW Energy Group Securities. Please review the Disclosure Policy .

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One Response to “MCW Energy Stock Analysis”

  1. avatar JT McGee says:

    Excellent find, Mark. With production costs that low per barrel, this company doesn’t have much upside on further increases in oil price, but it definitely doesn’t have much downside on oil beta, either. I’m not sure on your numbers, though, I saw a press release that looked like the oil production was only a very small part of its core business, and that it made only a few million dollars on revenues of $180M.

    Hopefully that service business isn’t sucking it dry. Maybe it’s the investment in oil sands? Not sure, but definitely worth doing some digging.

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