Stockchase Opinions

Mike Archibald Headwater Exploration Inc. HWX-T BUY Jul 06, 2022

Really good mid-cap. Good growth success. Very good management. Clean balance sheet, no debt. High growth potential. Good upside to higher oil prices.
$4.920

Stock price when the opinion was issued

oil gas
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PAST TOP PICK
(A Top Pick Apr 26/23, Up 27%)

High growth, about 40% production growth in 2023. Great ROC potential. Very well run. CEO change by year's end. Lots of running room. Good scalability. Expects a takeover in 12-18 months. Yields around 5%.

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Curated by Michael O'Reilly since 2020.
1550+ opinions with 4.81 rating (one of the best performing expert).

TOP PICK
Stockchase Research Editor: Michael O'Reilly

The Calgary-based oil and gas producer focuses on slow declining long-life reserves in Marten Hills and New Brunswick.  Recently reported earnings were up over 50% on the year.  It trades at 11x earnings, 2.5x book and supports a 27% ROE.  Its high dividend is supported by a payout ratio under 65% of cash flow.  We recommend setting a stop-loss at $4.75, looking to achieve $9.00 -- upside potential over 35%.  Yield 6.3% 

(Analysts’ price target is $9.18)
TOP PICK

Great exposure to the WCS-WTI gap shrinking this year as the Transmountain becomes fully operational later this year. The 6% dividend will grow 10-15% this year, and they plan to grow overall by 50% over 2023. Strong cash flow as they expand. Interesting exploration plans. Fantastic results.

(Analysts’ price target is $8.88)
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This is a Panic-proof Portfolio opinion which is available only for Premium members

Curated by Michael O'Reilly since 2020.
1550+ opinions with 4.81 rating (one of the best performing expert).

PAST TOP PICK
(A Top Pick Jan 30/24, Up 20.9%)Stockchase Research Editor: Michael O’Reilly

Our PAST TOP PICK with HWX is progressing well.  To remain disciplined, we recommend trailing up the stop (from $4.75) to $6.25 at this time.  

BUY

Checks the boxes: quality management, strong balance sheet and have decent inventories.

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This is a Panic-proof Portfolio opinion which is available only for Premium members

Curated by Michael O'Reilly since 2020.
1550+ opinions with 4.81 rating (one of the best performing expert).

TOP PICK
Stockchase Research Editor: Michael O'Reilly

We reiterate HWX as a TOP PICK.  Management reports production remains on target for annualized production of 20,000 boe/d for 2024 and capital has been allocated on several projects for the balance of the year.  It trades at 11x earnings and supports a 27% ROE.  Its dividend is backed by a payout ratio under 65% of cash flow, which still allows quarterly cash flow to grow.  We recommend trailing up the stop from $6.25 to $7.00, looking to achieve $9.00 -- upside potential of 20%.  Yield 5.4%

(Analysts’ price target is $9.32)
PAST TOP PICK
(A Top Pick May 31/23, Up 18%)

Large selloff recently after a momentum frenzy in the sector, he added. Now about a 5.5% weight for him. Targets $11 price, 51% upside. Yield is 5.5%, which will grow over time.

BUY

Great little small-cap name. Ongoing exploration success. A lot more running room. Should be trading at 70-80% upside from here. Yield is 6%.

premium

This is a Panic-proof Portfolio opinion which is available only for Premium members

Curated by Michael O'Reilly since 2020.
1550+ opinions with 4.81 rating (one of the best performing expert).

PAST TOP PICK
(A Top Pick May 07/24, Down 5.7%)Stockchase Research Editor: Michael O'Reilly

Our PAST TOP PICK with HWX has triggered its stop at $7.  To remain disciplined, we recommend covering the position at this time.  When combined with our previous recommendation this will result in a net investment gain of 2%.

BUY

Very well-run mid-cap, yielding 7.5%. Other stocks may have better valuations, but HWX has done a great job in the Clearwater, but prefers Tamarack. They have several successful explorations to expand their assets. This offers modest production growth and a juicy yield. He targets $9.