Eric NuttallHeadwater Exploration Inc. HWX.TOBUYApr 22, 2024

Trades at a 2x premium to TVE -- partly due to management's finding resources early and being successful. Thinks a lot of future upside already baked in, though may have another 20% upside. Prefers other names.

Phenomenally well run. Almost a pure play in the Clearwater, which is the most economic play in NA and it keeps getting better. Experimenting with water flooding, as have other companies, and the results have been spectacular. Generates lots of free cashflow. An emerging play in the Grand Rapids formation is exciting for future growth.

Trades at 8.4x this year's cashflow, a huge premium to peers. Ticks all the boxes except valuation. Better spot would be 7x, perhaps 8x at a stretch. For new $$, investors could look at TVE.

At 7.2x forward, trades at a pretty material premium to TVE (5.5x). Still relatively small. Great job focusing on the most economic play in NA. Good success, but TVE is getting better results. He'd sell this and buy TVE. Yield is 4.8%.

Sentiment is challenged. Not buying back stock. Complicated to follow all its different assets and all its different plays. Company hasn't communicated the story well. Trades at 6.5x, a premium, and that's a good reason to take chips off the table. Yield is 5.3%.

It is an under-the-radar company in Clearwater which is an economic heavy oil play. It has a very good land position with a multi year inventory of production assets. It is well managed and he is looking for a good upside of 35% in the stock price.     Buy 7  Hold 2  Sell 0

Company's done nothing wrong, excellent balance sheet. Hard-pressed to find an oil company stock chart that's up while oil is down. Still believes in the great strides it's making. Yield is ~7%, fully defendable down to ~$53/barrel.  Total return will be fine, even if oil price is not doing too well.

A high-quality small-cap. They've had good success with water floods. They pay a sustainable 7% dividend yield. You're paid to wait. Overall, he's neutral to bearish on oil for 9 months. The market needs to absorb the OPEC supply. HWX is debt-free.

Small-cap yielding 8%, sustainable in low $50s. Wouldn't be surprised if it dialed back capex, which makes the dividend even more sustainable. Almost a pure play to Clearwater, an exceptional resource. Owns in his income fund, on his list to add to the main fund. Inexpensive. Respected management.

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.

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%.

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.