Baytex Energy Corp (BTE.TO) Buy, Sell or Hold

Baytex Energy Corp (BTE.TO)

7.69

+0.24 (3.22%)

as of Oct 23, 2026, 8:00:01 pm Market Closed.

729 watching

DON'T BUY

A leveraged play on crude oil prices. She owns no energy stocks, because she wants to see clarity on takeaway capacity from Alberta. BTE will follow the price of oil. CNQ and Suncor are the better oil names.

DON'T BUY

Energy? He is not a big believer in entering energy yet. The market is totally different than it was five years ago. The world is finding more oil than ever. The Chinese are the biggest buyer of energy now and he does not trust how they have created a Shanghai index for oil and gold. Terrorist activity in the Middle East does not impact the price like it once did. He is staying away from energy as a whole. Baytex has fallen to such a discount, he thinks the market does not trust the sustainability of the balance sheet. He thinks this will come in the form of reserve right downs. His model price for the share price is $0.60.

DON'T BUY

Now, we're seeing a slight breakout from a base. January is volatile for oil stocks. Feb. 25 to May 9 is oil's seasonality. He prefers the oil large-caps though. He wouldn't consider BTE until seasonality.

BUY

It’s one of the junior stocks that he continues to like. It’s trading significantly below book value. The company has good assets in shale in Texas. It continues to pay down debt and deploy capital better. A well managed company.

PAST TOP PICK

(A Top Pick Dec 14/18, Down 28%) It has fallen off the radar screen. Their balance sheet is not as precarious as people think.

TOP PICK

It has under-performed the oil price by 60%. It is higher than a 20% free cash flow yield. They plan to harvest free cash flow to pay down debt. He hopes they will then buy back stock. (Analysts’ price target is $2.97)

BUY

Oil 2020 outlook He's bullish oil, given OPEC production cuts. The perception of BTE is heavily levered, heavy oil, but they actually have 60% production in Permian light oil. The balance sheet is much better now after paying down debt, dropping to 2x debt-to-cash flow. They could buyback shares. He's added to this recently. Tax-loss selling and the flight of capital have pressured oil stocks. He expects a bounce to come, but doesn't know when. Eventually, rationality comes to markets. Oil stocks boasts 20% free cash flow yield--you should make money on these at some point. When, he doesn't know, but the situation looks better now.

PAST TOP PICK

(A Top Pick Nov 16/18, Down 38%) Multiples have contracted to 3 times cash flow. It is not that their cash flow has shrunk, it is just that investors are not willing to pay historical values. It has lost some of its credibility. It trades at 17% free cash flow yield at $55 oil. The company has 4 years of reserves that are currently flowing. Their holding in the Duvernay, is a commanding position. A large holding for him.

COMMENT

The valuation has gotten so low. Baytex has a lot of Permian oil investments which is good. Debt has come down to 1.5 times. Balance sheet is in much better shape. They are generating free cashflow and can buy back stocks now. 15-20% yield at current oil prices. A lot of the sector looks like this due to supply and demand. Energy stocks are cheap and valuations are ridiculously low. He still likes it, but it hasn't made any money in the last year. (Analysts’ price target is $3.29)

PAST TOP PICK

(A Top Pick Oct 19/18, Down 43%) He still owns this and added yesterday. He was uber bullish oil last year as Iran was about to face export constraints (they were later waived by the US). They have interest in the Eagle Ford and one of the biggest plays in the Duvernay Shale in Canada. The new production is very economic at today's WTI price levels. They could soon see big share buybacks as cash flow improves.

BUY

Heavy oil? He is bullish on heavy oil as countries like Venezuela have seen production fall to 20 year lows. Mexico is declining as well. This is good for Canada, but we are still pipeline constrained. At $60 WTI and $15 heavy oil differentials he likes CVE-T, MEG-T and BTE-T.

TRADE

He stock now is so cheap that he is not longer in the sell camp. It will service debt with a lot of cash flow if we hit $70 oil as he thinks we will.

COMMENT

They are rationalizing the management structure given their debt after acquiring Raging River. They are trying to get more into light oil. A recession would cause oil prices to fall and with it the stock price.

TOP PICK

Baytex bond: 6.625% 2022 It's their bond, paying a 6.625% rate of return. They own Eaglesford, a Texas shale asset, that could cover this entire bond if BTE ever went into receivership. BTE won't and in fact is doing well. BTE stock is too volatile. The bond is good for conservative investors.

RISKY

It may be slightly lower in reputation compared to his other holdings. It is very low valued and he thinks they have fixed the balance sheet. Ten years ago it traded almost $60 per share. They added leverage when oil prices were high and made a large US acquisition at the wrong time. The stock will never return to those lofty levels, it may get back to $4-$5 -- still a great return. A little bit riskier this could be a speculative buy. Yield 0%

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Baytex Energy Corp (BTE.TO)