Control Empresarial de Capitales S.A. de C.V., a significant shareholder in Talos Energy Inc. (NYSE:TALO), has recently increased its investment in the company by purchasing additional shares. On July 30, 2024, the company acquired 250,000 shares of Talos Energy at a price of $11.4 per share, amounting to a total investment of $2.85 million.
This transaction has further solidified Control Empresarial de Capitales' position in the energy company, bringing their total ownership to 38,222,904 shares. The purchase demonstrates a strong vote of confidence in the future of Talos Energy, a firm that operates in the crude petroleum and natural gas industry, with its headquarters in Houston, Texas.
The ownership stake of Control Empresarial de Capitales in Talos Energy is substantial, with the company's shares constituting approximately 20.8% of the total issued and outstanding shares, as reported in the latest Form 10-Q filed by Talos Energy with the SEC.
The transaction details were disclosed in a Form 4 filing with the Securities and Exchange Commission, signed by Marco Antonio Slim Domit as attorney-in-fact on August 1, 2024. It's noteworthy that the Slim family, as beneficiaries of a Mexican trust that owns all the voting equity securities of Control Empresarial, may also be deemed to beneficially own the shares held by the company.
This recent purchase by Control Empresarial de Capitales underscores the ongoing interest and investment by major shareholders in the performance and prospects of Talos Energy Inc.
In other recent news, Talos Energy has been making significant strides in its financial strategy. The company has repurchased approximately $43 million of its common stock and reduced its debt by $100 million, leaving $225 million outstanding. In addition, an extra $150 million has been approved for the existing common stock repurchase program.
Goldman Sachs has initiated coverage on Talos Energy, giving it a Buy rating and setting a 12-month price target of $14.00. This valuation is based on a 2026 free cash flow yield methodology, with a predicted production of around 92 thousand barrels of oil equivalent per day in 2024. On the other hand, Citi maintained a Buy rating on the company but reduced the price target to $14.50 from $16.50, following an update to their earnings estimates.
The revised estimate predicts a discretionary cash flow of approximately $276.8 million for Talos Energy, slightly below the consensus of around $282.3 million. In terms of other developments, Talos Energy reported a strong first quarter in 2024, with significant transactions such as the QuarterNorth acquisition and the divestment of their CCS business leading to an increase in production guidance. The company aims for a $550 million debt reduction by the end of the year and plans to pay down its revolver debt completely by the end of 2024.
InvestingPro Insights
As Control Empresarial de Capitales S.A. de C.V. reinforces its stake in Talos Energy Inc. (NYSE:TALO), investors may find it beneficial to consider the latest data and insights provided by InvestingPro. With a market capitalization of approximately $2.13 billion, Talos Energy's financial health and future outlook are of keen interest to stakeholders.
InvestingPro data reveals that Talos Energy has a negative P/E ratio of -102.86, indicating that the company has been operating at a loss. Adjusted for the last twelve months as of Q1 2024, the P/E ratio improves slightly to -36.12. This could suggest that while the company has faced challenges, there may be signs of improvement on the horizon.
Additionally, Talos Energy's revenue has shown a modest year-over-year growth of 0.33%, with a more significant quarterly surge of 33.36%. This growth is reflected in their gross profit of $1.12 billion and a gross profit margin of 71.63%, highlighting the company's ability to generate income from its sales.
InvestingPro Tips further enhance the picture for potential investors. Analysts have noted that Talos Energy operates with a significant debt burden and that net income is expected to drop this year. Moreover, three analysts have revised their earnings downwards for the upcoming period. These factors may have contributed to the stock's volatility and the current trading at a high EBIT valuation multiple.
For those considering an investment in Talos Energy, it's important to note that the company does not pay a dividend to shareholders, which might be a consideration for income-focused investors. However, analysts predict the company will be profitable this year, which could signal a turnaround for the company's financial performance.
InvestingPro provides a comprehensive suite of additional insights, with many more InvestingPro Tips available for Talos Energy at https://www.investing.com/pro/TALO, offering in-depth analysis and guidance for investors.
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