Opinions
James Telfser
Crew Energy Inc.
CR-T
DON'T BUY
Apr 13, 2023
$4.830
Stock price when the opinion was issued
oil
gas
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DON'T BUY
He used to own this when natural gas was $3-$4. The equity value of this company is being ground down, day after day. It has to spend money to keep going. Be careful with these small cap names. These will be one of the first ones that banks will require to consolidate due to credit exposures and bank line covenants. A high risk investment.
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BUY
Enterprise value is very cheap. But the issue is they have debt. They did an infrastructure deal to reduce that debt. A big part of that debt is a 2024 maturity at a low interest rate, so Crew will survive. Their liquids are in a condensate-rich area. The stock has been hammered because of high debt. He's bought more of this in the past week.
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RISKY
It is a stock that is very cheap. With high energy prices, that has lifted all of these companies. It was as low as 10% of its book value. His fair market value has been going literally straight up. He would stay with it. He recommended it as a speculative buy a while ago as it made sense. He would prefer to buy a junior oil ETF rather than bet on one junior oil company.
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Nat gas prices have been slaughtered, which impacts this one. Likes that it managed to cut production. Bit of an overhang in nat gas, so there's an overhang on valuations. He focuses on the larger integrated players like CNQ.