Opinions
Larry Berman CFA, CMT, CTA
Obsidian Energy
OBE-T
COMMENT
Jun 13, 2016
$1.610
Stock price when the opinion was issued
oil
gas
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HOLD
A takeover candidate? He was wrong with this. He recently moved it from a buy to a hold. It's high-risk and high-reward, has "danger" written across it. He likes the idea of a takeover, but doesn't know if it'll happen. This could be a good play in oil/gas with a lot of potential. He hasn't sold it, but at the same bankruptcy remains a real possibility.
oil
gas
DON'T BUY
New interim president and CEO. Pretty good numbers on cardium wells. Issue is the debt. Debt is 22% of equity, but it's going the wrong way. Declining production and volumes. Not as attractive as the others. Need to show they can grow core numbers of the cardium. Guidance is negative. Capex is about equal to cash flow.
oil
gas
PAST TOP PICK
(A Top Pick Oct 22/18, Down 88%) He sold at $3.22, taking a big loss. They have a lot of worries. They are looking to sell the company. They might just liquidate the company, but clean up could be very expensive. He does not like stock consolidations and used that as a trigger to get out. He would not buy this now. He made a mistake -- when debt came down, so too did revenues.
oil
gas
They have pulled off $1.1 billion in asset sales in Saskatchewan and Alberta, and were upgraded by a number of analysts. Raymond James to $3 and BNS to $2.25. There is probably some additional upside looking out over the next year. However, there are a couple who are neutral to flat with lower price targets. He would suggest you try to read all the stories on why they have their various price targets. The chart shows a tremendous amount of resistance, and he believes in the idea of “lower for longer”. Oil should probably stabilize over the next few years in the $50-$60 range, but by no means whatsoever are we coming back into balance. Inventory levels are massive compared to the 5-10 year averages. Thinks that will be with us for years and years to come. Wouldn’t be a big investor yet, but more inclined to probably Sell into this.