Birchcliff Energy Ltd. (BIR.TO) Buy, Sell or…

Birchcliff Energy Ltd. (BIR.TO)

7.02

-0.36 (4.88%)

as of Nov 2, 2026, 9:00:00 pm Market Closed.

292 watching

DON'T BUY

If oil recovers. He looks for price momentum, cash flow, balance sheet and low volatility. Oil stocks have none of these. He was net-short energy stocks yesterday. BIR has too much debt vs. their cash flow. He'd look at low-cost Suncor, which has a strong balance sheet, or CNQ (stronger balance sheet despite debt), or Parex which has net cash and a strong balance sheet.

COMMENT

TOU is too high of a natural gas exposure for him. BIR is overspending their cash flow to fill a plant they invested in for the promise of free cash flow next year. If you believe the strip pricing next year, they will generate a 26% free cash flow yield. However, it is also natural gas related. He just thinks there are better buying opportunities from the over selling in the oil markets from the Corona virus.

TOP PICK

The company has disappointed the market that there will not be a surplus of free cash flow in 2020. However, he believes in 2021 they will be able to pay down debt aggressively and still have surplus to buy back shares and increase the dividend. By 2024 the free cash flow will be in excess of $760 million and he thinks they will use this to grow shareholder value. Yield 5.88% (Analysts’ price target is $4.23)

WATCH

Their spending budget exceeds cash flow. He likes the management team. There is the possibility of a reserve write down. It is probably interesting at this level. But he would let it settle out for a while and not get involved.

BUY

He is not shy about taking a profit when he makes the easy money. It has a 12% free cash flow yield. He would like to see more inside ownership but it is a good way to get exposure to an increasing commodity price backdrop.

BUY

About a 5% monthly dividend. He intends to buy more. The balance sheet is not a problem. They will be a big beneficiary of LNG. The management team has done a good job in the past for shareholders.

BUY ON WEAKNESS

How does it change a stock when it leaves the TSX? It is just a market cap thing. It has nothing to do with the value of the company. They benefit from LNG. Tax loss selling will attach this one but be will be a buyer.

BUY ON WEAKNESS

It has had a nice bounce and he would be a buyer on any weakness. He has a target of $5 in twelve months. It is over a 4% dividend yield.

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DON'T BUY

There's an abundance of natural gas, but there's a lag in the build-out for further LNG capacity. Globally, there's an overbuild of LNG capacity that takes time to soak up; Euro nat gas prices have plunged. He's not excited by natural gas. Pays almost a 6% yield because the share price has fallen so much. Nothing against BIR, but the nat gas space is troubled.

TOP PICK

Nat Gas producer in the North West Alberta. 5.44% dividend yield. He likes it a lot and has a $5 target. (Analysts’ price target is $4.70)

BUY ON WEAKNESS

Likes the company. His one-year price target is $5. Balance sheet very strong, good growth potential when gas prices pick up. Intends to buy more. Yield is about 3.5%. Raised dividend about 5% a couple of months ago.

HOLD

A premiere gas producer with good critical scale. He owns it, but it will take some patience. It has 20% in liquids and their gas pricing is non-AECO and non-Station 2 (BC), moving into the Chicago market.

PAST TOP PICK

(A Top Pick Mar 16/18, Up 12%) The balance sheet is in good shape. They are now guiding flat. They will knock off some debt this year. Book value is $6.67 and he has a $7 target. He keeps on adding to it. They raised the dividend in the last quarter.

COMMENT

He likes energy in general, and BIR will likely reach $5, but doesn't know if it'll rise higher than that.

DON'T BUY

He is challenged with natural gas in general in North America. There is a tonne of low cost supply. There are other names he would strongly prefer. He would not have exposure to Canadian nat gas stocks now.

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Birchcliff Energy Ltd. (BIR.TO)