Baytex Energy Corp (BTE.TO)

He owned this company when they had a real good balance sheet. Debt load has gone up. He sold this when oil went bearish. It has continued to struggle and has not really looked at it since. Probably could go to a lower leveraged oil play and take on less risk.

A slowly slipping balance sheet, because its forecast earnings are only 6 cents per share. He doesn't expect a turn in the earnings to lift the stock.

The recent merger with Raging River has not been well accepted by the shareholders. It is trading at 3.3 times EBITDA at $70 oil. He sees almost 100% upside if reasonable metrics return on the valuation. It plays well into the view of tighter heavy oil differentials and WTI trading over $80 next year. Yield 0%. (Analysts’ price target is $6.12)

A heavy oil producer that still has leverage on the balance sheet. He would look elsewhere, unless you think WTI is going to $100.

A highly levered oil name. When the oil price moves, it moves with it. It is a pretty high debt name. You could probably make some money here. It is not a name the masses would want to own because of the volatility. It will be tough for it to get back to the previous highs. It will probably not be a positive in that they are merging with RRX-T, Raging River.

This is one of the companies that he follows to some degree. It is possible toward the end of the year he might hone in on it more closely. With all of these companies, take a look at debt load relative to revenues. He may buy it later in the year, depending on his firm's analysis

(A Top Pick August 3/2017, Up 12%) Still trading at a discount. If I can get 12% out of a bond, why would I buy equity? Less risky to own the bond than the stock. Buying the stock would need the price of oil to go up, guaranteed.

It is challenged like CPG-T in that there is excess capacity and not enough sales. He can't comment on the merger as he is not an M&A expert.

Merger is not popular with Raging River shareholders. However, Baytex shareholders are saying it is a wonderful deal. Have added a free cash flow machine in their Viking asset. This name has been beaten down by Raging River shareholders. The deal gets voted on mid August. At $70 oil he has a $7.00 target and at $80 oil he has a $10.00 target. That is 60% to 130% upside. (Analysts’ price target is $6.00)

They are making the acquisition of Raging River (RRX-T). Raging River will control the merged company afterwards. BTE-T has had quite a few problems. Both stocks reacted negatively when the deal was announced so he would stay away from it.

They got themselves in trouble when they over paid for an acquisition. This one has a hill to climb so it is a question of how long you are prepared to wait it out. Ultimately you will be rewarded. There are better names to invest in, however.

Bought Raging River, multiple is in line, and they have decent growth. Market thinks they overpaid for Raging River, but if you buy good rocks, you’re going to get a good result.

RRX-X amalgamation. Both went down when they announced the merger. This is unusual. There are a lot of costs involved in a merger for a quarter or three. He does not like all-paper transactions.

BTE-T vs. RRX-T. RRX-T has been taken out by BTE-T. One analyst says you will now own a company with a much higher debt. BTE-T is a zombie company because of debt. 78% debt to equity last time he talked about it. After the deal RRX-T will have a huge increase in production. If you believe in $80 oil by year end then this a good leveraged play on oil. He thinks we will below $60, the problem is that this stock is too levered. It will be at 75% debt to equity. The market is voting negatively on the deal.

Texas and heavy oil in Canada. Their price for oil is more linked to Louisiana than to Canada. (Analysts’ target: $6.09).