Baytex Energy Corp (BTE.TO)

Likes this one, as well as the whole Canadian oil/gas complex. Unusually good job of beating forecasts over time. He just doesn't have room for all names in his portfolio. Probably a very good choice for dividend-conscious people.

The US and Iran may be struck a peace deal and could be reopening the Strait of Hormuz, but there's a big backlog of oil. They have to rebuild what was destroyed to resume oil production. Strategic reserves need to be refilled. All this takes time. That's why it will keep oil around $80 a barrel. BTW can make money at $60. Beyond 6 months, oil producers will make money hand over fist. BTE's uptrend may be in question, but expects it to find support at current levels.

Size isn't quite there for him yet. Really positive that new CEO isn't collecting a salary, just stock options. Exposed to highly profitable plays in Canada. Net cash to probably use for buybacks. Perhaps some M&A. Work in progress.

Suspects there will be volatility. We're seeing it in the oil price depending on which tweet comes out. The floor for oil prices is higher on the back of the conflict, perhaps around $80 -- geopolitical premium, reservoir damage, production lost, need to refill inventory.

This company has torque to that. If you want to play that game in the short-term, this is a decent vehicle for that. Company's stronger from its reorganization.

Good in terms of capital employed. Wants to see it reduce yield to shareholders and increase sustaining capital investments and new project investments. If you’re underweight energy, you need to get long. He’s very bullish on Canadian oils, but he loved them better at $60 than he does at $100.

Used to be the beta name for leverage to oil. Doesn't have that as much anymore. Cash on balance sheet will be used to buy back shares. With oil where it's at, you get paralysis on M&A (sellers want current price, buyers want to pay what it was a month ago).

Approaching fair value, though can maybe spin out another 10-20%. See his Top Picks.

If an investor has more information than the rest of the market, that's a real inside track on a company. Thinks the energy sector is quite sustainable. Has never owned, but he's now going to take a look at it.

Western Canadian O&G companies are all having a field day with higher oil. They'll all work until the Strait of Hormuz opens. A short-term play.

No more room to run. Levered, higher-cost oil sands play. Stretched balance sheet. Sold Permian assets, now it's left with Canadian assets at premium valuation.

Instead, look at TOU, CVE, or WCP.

He met management twice last month. A few years ago they bought a US company that the market did not like. Since then, Baytex has sold all its US assets. It remains a show-me story, though they are buying shares and is relatively cheap.

Better stocks to own for the dividend. You'd own this one for its pivot back to Canada, and for its recent sale of Eagle Ford (which generated lots of cash). Intends to use much of that cash to significantly buy back stock (over next year+ intends to buy back ~20% of stock).

He took profits, as it was more of a short-term tactical play. Thinks FMV is ~$5-5.50. Comfortable with its inventory (10-12 years of stay-flat inventory), and it's proven to replace production year after year. Given current relative outperformance, he'd invest in other names.

At his firm, there are about 700 companies in Canada that they look at and rank daily. Ranking is based on earnings acceleration. This name is in the top 20%. Likes management and its capital efficiency, which falls to the bottom line and drives stock price higher. Has done really well, especially as there have been no tailwinds in energy for last 6 months.

Great job of repositioning. Had a debt problem and faced with falling oil price. Sold off Eagle Ford for a pretty good amount, and paying down debt significantly. Once in net cash position, will then use 75% of cashflow for shareholder returns. Expects significant share buybacks, roughly 20% over next year. That should bring share price to $5. But then they need to do something.

Doesn't have as much inventory (only 10-12 years) as they need to gain relevance. Should acquire some stranded small caps.