Baytex Energy Corp (BTE.TO)

Will continue to hold shares in company.
Major correlation in oil prices.
Solid assets with decent management team.

Didn't like this for a long time because of its balance sheet, but they have turned things around. If oil stays at these levels, its balance sheet isn't bad. Pays good shareholder returns. 35% production growth ahead. It's improving.

The chart is in a downward trend whereas most other energy stocks are trading sideways. He traded it 1 1/2 years ago. He doesn't know the fundamental reasons for the downward trend but investors should look for a base before considering buying.

His thesis is that it's the meaningful return of capital that will drive the rerating of share price. Ranger acquisition was 19% free cashflow per share accretive. Deal will close in 3 weeks, and they'll initiate modest dividend and start buying back stock. Deep value due to Ranger being misunderstood and backed by private equity.

He keeps adding. Meaningful upside. Multi-bagger potential, but you have to get past the overhang.

Highly leveraged to oil. Price of oil has been weak, but the outlook is better and BTE should enjoy some of that. Pipeline to Vancouver will benefit. Profitable. Comfortable holding or buying a bit more.

Look at a 10-year chart. Locked in a trading range for a while. Energy will be in a sideways trading range, dead money. Has potential to move to $15, but it won't be for a while, perhaps the end of 2024.

Big acquisition recently. He likes it, market doesn't. Energy has seen a big push for dividends, free cashflow, and return of capital. An acquisition may be sound strategically, but many investors don't like taking on any kind of debt. Will manage balance sheet prudently. Decent returns at current oil prices. See his Top Picks.

It all depends on execution. What does the overall asset quality end up being? Depth of inventory? What happens to commodity prices? At 82% of enterprise value, this is a very big deal for them. A show-me story. Cheaper than peers. Nice production and 9% cashflow per share share growth, which is slightly ahead of the group. 

Likes it, but safer bets elsewhere.

Ranger acquisition (Ranger Oil) misunderstood by the market.
Believes deal is accretive on a per-share basis. 
CEO recently buying back stock himself.
$70 oil would equate to $700 million in free cash flow.
Bough 4mm shares last week.
Has ownership in Clearwater play - the most economic play in North America.

Looking at the chart, pretty big runup since the pandemic. Most energy stocks have had a sideways consolidation over the last year or so. Oil likely to move lower and be in a sideways, choppy trading range. Easy money's been made.

Recent US acquisition will be hard to digest.
"Show me" stock that has yet to prove itself.
Time will tell whether acquisition will pay itself out.
Wait to buy.

It has run up 62% in the past 5 years, so maybe leave it for now till it settles. Shares have done very well. There's not much ahead for a company growing a lot. Wait for the dust to settle.

Largest shareholder of company.
Expects shares to rise to $20 (believes fair price of shares).
Increasing production in Eagle Ford play.
Currently drilled top 15 of all Clearwater oil wells.
Expecting debt to reach target level by Q2.
Has pledged to return 50% of free cash flow yield.
Expecting a 12-20% dividend yield.
Currently mis -priced shares.

Found new religion in terms of paying down debt. Better growth assets and more light oil assets. Returning money to shareholders. Growth, low valuation, leveraged to oil, more shareholder friendly. No dividend.