Opinions Paul Tepsich
Athabasca Oil Sands CorpATH.TOTOP PICKApr 25, 2016
Paul TepsichStock price when the opinion was issued
As of May 29, 2026. Market Open.
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Thinks it's a double from here (not a 1-year target). Meaningful compounding of share buybacks over time. Roughly 35% upside next year at $80 oil.
Despite the runup, long-term upside warrants being exposed today, as long as you can ride with the volatility.
Eric Nuttall
What do you want to own today? Canada. Oil. Asset duration. Free cashflow. Share buybacks. This name checks off every single box. Still sees over 100% upside long term at $80 oil in this name, so he's trying to sit on his hands and not sell.
He'd have made it a Top Pick again today if he were allowed.
Eric NuttallThe high is around $8. It just broke above recent highs in the consolidation zone. Pretty important technical resistance is around $7. Likes it here, and doesn't mind buying at these levels. Positive, long-term trend on the 5-year chart.
Awesome chart, especially given how choppy crude's been. Crude picking up would be an additional tailwind.
In a post-shale world, Canada will receive a lot of fund flows. He took advantage of the Venezuelan selloff to increase his position weight in this name.
Eric NuttallA long-term hold. He's going to do his best to sit on his hands and never sell a share, as he sees meaningful upside over time. Ramping up current production, looking to start a new project. Once those both get going, has 40 years of stay-flat inventory (phenomenal).
Eric Nuttall
Massively buying back stock. Roughly 70+ years of stay-flat inventory. Plus, has probably benefited from sellers of MEG looking for a similar name. Bit of a premium valuation at 8.2x forward cashflow. Sees meaningful long-term upside, especially with his prediction for $80 oil.
Eric NuttallIs benefiting from weakness in American shale. The Oil Sands have been overlooked for a long while; the Oil Sands have supply unlike much of the world which is and will face oil supply shortages. ATH has no debt. They will have over 50 years of stay-flat inventory. Have low or no growth, but will buy back as much as stock free cash flow allows. There is a take-put premium in the current share price. At $70 oil, this will trade at 11% free cash flow yield. He sees $80 oil in a year or more, but not for the next 9 months at least. Great managers.
Eric Nuttall
No debt. Roughly $134M net cash. Business model is defendable down to $50 oil. Purish-play, oil sands name. Very clean story. Modest growth, 50+ years of stay-flat inventory. Residual free cashflow dollars are being used to buy back shares. In March alone, bought back 2% of shares outstanding. Management team is underestimated, has done a fantastic job. Gives you exposure to better days ahead for oil. No dividend.
(Analysts’ price target is $6.19)Eric NuttallBuy any dip. They will modestly grow production over 5 years and buy 68% of shares at the current oil price; at $80 they could almost privatize. At $70 oil in 5 years, they will free cash flow at the current share price. Has 50 years of stay-flat inventory. At flat oil, will go from 3.9x cash flow this year, 3.2x in 2026 and 0.3x in 2029.
(Analysts’ price target is $6.42)Eric Nuttall
7.5% bond maturing Nov 19/17. Probably one of the only exploration/production companies on the continent that is in a net cash position. It will have about $900 million in cash when they do the Murphy Oil joint venture, and have about $800 million of debt. The bond is worth $550 million. More senior to it is a bank debt of about $250 million. The $250 million debt matures after the bond in 2019, which is not a position that bankers usually like. The loan has a “springing” maturity, which means if any of the bonds are outstanding 6 months before they are due, the bank debt becomes due immediately. The company likes the bank debt which has a very attractive terms. Thinks the company is going to do a combination of paying down all this bond and maybe refinance with the new bond for $150 million.