10 Best Small-Cap Value Stocks to Buy Now

6. MRC Global Inc. (NYSE:MRC)

Forward P/E Ratio as of March 19: 10.63

Market Capitalization as of March 19: $1.06 billion

Number of Hedge Fund Holders: 29

MRC Global Inc. (NYSE:MRC) distributes pipes, valves, fittings, and infrastructure products. It serves the energy, industrial, and natural gas sectors. It offers a range of products and value-added services that support the construction, maintenance, and repair of equipment operating in demanding environments.

The Gas Utilities sector at the company demonstrated notable stability and grew its revenue by 3% sequentially in Q3 2024, which amounted to $295 million. This growth was driven by heightened customer spending due to seasonal factors and a return to normal purchasing patterns as customers completed their destocking processes. Q3 marked the third consecutive period of sequential growth for the Gas Utilities sector.

Industry analysts and several of the company’s largest customers have publicly announced plans to increase capital spending on natural gas infrastructure maintenance projects in 2025. Furthermore, projected annual capital expenditure growth rates for the gas utilities served are expected to range from 4% to 6% over the next five years. This forecast reinforces the sector’s healthy growth environment and long-term viability, which will benefit MRC Global Inc. (NYSE:MRC) in the long run.

Alluvial Capital Management has been optimistic about MRC Global Inc.’s (NYSE:MRC) strong earnings guidance, debt reduction plan, and potential for positive catalysts. It stated the following regarding the company in its first quarter 2024 investor letter:

“MRC Global Inc. (NYSE:MRC), our equipment distributor to oil and gas drillers and gas utilities, also had good news for us. The company issued healthy 2024 earnings guidance and revealed a plan to pay off its term loan with a combination of cash flow and a draw on its asset-backed loan facility. The market responded positively, but shares still change hands at just five times 2024 operating cash flow. MRC has also announced it will provide activist hedge fund Engine Capital with a board seat. I welcome the additional oversight that Engine will provide. There is no word on progress toward resolving the situation with the unhappy holder of MRC Global’s convertible preferred shares, but a resolution could come at any time and would serve as a positive catalyst for MRC shares.”