While the market fixates on the latest tech IPO or meme stock frenzy, a silent giant stirs in the Canadian energy sector.

TC Energy, a seemingly mundane energy infrastructure company, reveals a startling story within its recent financial data – a story of strategic downsizing,

debt reduction, and a potential surge in profitability that might be going completely unnoticed.

Typically, an expanding company with ambitions for growth increases its shares outstanding.

However, TC Energy has been quietly and systematically reducing its shares outstanding over the past three years.

In 2021, the company boasted over 4 billion shares outstanding. By the end of 2022, that number was slashed to just over 1 billion,

a reduction of over 75%. This year, the trend continues, with shares outstanding remaining at a steady 1 billion.

This isn't a stock split; it's a deliberate and calculated move.

The Downsizing Strategy

Source: TC Energy Reports and Filings

Now, why would a company shrink its market presence? The answer might lie in the company's balance sheet.

TC Energy has been wrestling with a significant debt load, hovering around $50-60 billion for the past few years.

Interestingly, in the last year, their net debt has started to decrease, reaching $59.8 billion by the end of 2023.

This suggests a focused effort to pay down debt, possibly facilitated by the proceeds from the share repurchases.

The confluence of these two factors - reduced shares outstanding and decreasing debt - paints a fascinating picture.

With fewer shares in circulation, earnings per share (EPS) experience an automatic boost.

Combine that with a lighter debt burden leading to lower interest expenses, and we have a recipe for a potential explosion in profitability.

The company's recent performance data only adds fuel to this hypothesis.

Despite a slight decrease in quarterly earnings growth year-over-year (-0.098), the company's trailing P/E ratio stands at a low 5.12, suggesting undervaluation.

Furthermore, their profit margin of 0.1731 indicates their ability to generate healthy profits.

The Potential for a Price Explosion

Could this be a signal of TC Energy preparing for a massive leap forward?

Imagine a scenario where their debt is further reduced, boosting their credit rating and lowering interest costs.

Simultaneously, with a smaller share pool, their EPS skyrockets, drawing the attention of value investors and potentially catapulting their stock price.

It's like watching a coiled spring, gathering energy for a powerful release.

While the market remains oblivious, focusing on short-term trends, the groundwork for a long-term value play is being laid right under our noses.

"TC Energy's deliberate share repurchase strategy and debt reduction efforts, coupled with their inherent profitability and low valuation, suggest a potential for significant stock price appreciation in the near future."

The Numbers:

Shares Outstanding Reduction (2021-2023): Over 75%

Current Net Debt: $59.8 billion (decreasing trend)

Trailing P/E Ratio: 5.12

Profit Margin: 0.1731

Of course, this is just a hypothesis based on current data. Market conditions and the company's future performance will ultimately determine the outcome.

However, for astute investors seeking undervalued opportunities, TC Energy's current trajectory is certainly worth a closer look.

Could this sleeping giant be about to wake up and roar? Only time will tell.

"Fun Fact: Did you know that TC Energy operates the longest natural gas pipeline system in North America, spanning over 93,000 kilometers!"

Source: TC Energy About Us