Summary:
1. Decagon Asset Management initiated a new stake in Chart Industries during the third quarter.
2. The company manufactures engineered equipment for energy and industrial gas sectors.
3. Chart Industries recently reported record orders and high profitability.
Article:
Decagon Asset Management, based in London, made a strategic move during the third quarter by establishing a new position in Chart Industries. This decision was not driven by a temporary market trend but rather by the opportunity to secure exposure to a company with a strong industrial presence and a substantial number of orders.
Chart Industries is a leading manufacturer of engineered equipment for the energy and industrial gas sectors. Their product portfolio includes cryogenic tanks, heat exchangers, and process technology for various applications such as LNG, hydrogen, and CO2 capture. The company generates revenue through equipment sales, aftermarket services, leasing, and repair and maintenance solutions, catering to a wide range of industries.
Recently, Chart Industries announced record orders amounting to $1.68 billion in the third quarter, marking a significant increase from the previous year. This surge in demand has pushed their backlog to approximately $6.05 billion, the highest level in the company’s history. Despite transaction-related costs impacting reported earnings, the company’s adjusted operating income reached $251.5 million, with an adjusted EBITDA of $277.1 million, showcasing a robust margin profile.
Decagon Asset Management’s portfolio emphasizes capital-intensive infrastructure and industrial assets, making Chart Industries a strategic addition. The company’s strong fundamentals and anticipated $210-per-share cash outcome from the Baker Hughes deal offer an attractive risk-reward profile for long-term investors. This aligns with the fund’s preference for stable investments over high-multiple growth opportunities.
In conclusion, Chart Industries presents a compelling opportunity for investors looking to gain exposure to a financially sound company with a strong industrial foothold. The recent surge in orders and profitability further solidify the company’s position in the market, making it a promising addition to Decagon Asset Management’s portfolio.
