Baytex Energy Corp (BTE.TO)

Valuation is very cheap. Unlike the past, they have a varied portfolio of operations. Huge cash flows and are buying back shares that will likely rise later this year. Cyclical, but undervalued. Should be trading at $7.

Set up to do quite well for second half of the year. 

Disappointing laggard. But sees profound value disconnect between where stock's trading and where it should be. The Q1 heavy spend is done. Now buying back shares aggressively with half of free cashflow, and this should set it up to outperform; rest of free cashflow is being used to pay down debt. Yield is 2%.

Oils have been trading sideways. Stock's close to midway between one of its trading ranges. Stuck in limbo for next few months. Not great during summer seasonality. OK on dips, but don't expect much for a few months.

See his (really good;) blog on oils, being published tomorrow.

Owns shares, but has been frustrated. Stock price not performing well. Company has improved a lot through the years. Strong assets with cheap valuation. Will continue to hold shares. Expecting continued strength in energy prices. 

Good company, would recommend buying. Does not own shares - owns others in the sector instead. However, is a good name. Overall, a positive time in the energy space. 

Energy is the most undervalued sector in Canada. This year, global world consumption will hit a record high. Yes, we need to find alternative energy, but demand is insatiable. The bigger names like Suncor trade at much higher PEs, but investors will eventually look at smaller names like this. Hold, if you own, and you can add shares.

Massive disconnect between its fair value and where it's trading. It hasn't been great for investors this past year. At least 10 years of inventory. Drilling some of best wells after its acquisition. Likes the new CEO. Capex spending going down, frees up cashflow for buybacks. Target of $10, so more than double. Yield is 1.9%.

His largest weight in the fund. His highest conviction right now.

Does not recommend investing. Would rather CNQ, Imperial Oil, Arc Resources or Tourmaline. Better names in energy sector. 

He's been patient with this. It's his second-largest holding. A misunderstood stock with investors thinking their oil was lousy because they bought a garbage company drilling lousy holes. Now, BTE is drilling top-quality wells. Also, they had a tax issue with Ottawa that has since been solved. Ongoing noise. Is confident with the new CEO who's bought a lot of shares. Trades at 2.5x cash flow, a discounted valuation like no other. Are buying back shares. Caveat: their #2 shareholder will eventually sell. He targets $10.

A contrarian call. Did an acquisition last year which created an overhang; the equity partner sold a third of its position. They took a modest reserve writedown on some of their tier 2/3 plays. He likes them for the results of their drilling in those new wells, continue to make discoveries in conventional oil, and a new pipeline will make a massive change to the WCS price differential to WTI. The CEO keeps buying shares, including last week. A major position for him.

They had a rough quarter while peers did well. Is not in his top 10 energy names. They're struggle to reposition into higher-margin plays as they struggle with their debt. Lacks consistency and is a high-beta name.

Energy looks good in recent days. The current low is interesting and similar to one in early 2023; share are climbing currently. In the last 2 weeks, Baytex has outperformed the S&P. The energy sector looks good.

Not being rewarded for M&A activity. Management promises of re-rating on stocks is not trusted by the markets. Believes company will gain higher valuation if focuses on prudent capital allocation (share buybacks etc.) Would advise investors to ignore over reactions of market (both negatively and positively). 

Technical perspective - downward trend not a great sign. Expecting a bottom soon in stock price which would be a good place to buy. Energy prices will rise soon.