Opinions
Eric Nuttall
Parsley Energy
PE-N
TOP PICK
Jul 19, 2017
$29.130
Stock price when the opinion was issued
Energy
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PAST TOP PICK
(A Top Pick Dec 14/18, Up 24%) They are in the Permian, where production is constrained, but improving. The new CEO is strong and the company is trading at 4 times cash flow. He expects to see a large M&A wave to drive up trading multiples to 7 times cash flow, making companies like PE-N seem relatively cheap.
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COMMENT
US oil stocks He holds 80% Canadian oil and 20% American, and those are two American stocks: Parsley and WPX-N. Good assets, better than peers. If you want American oil, but not Exxon Mobile, looks at these two.
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PAST TOP PICK
(A Top Pick Nov 16/18, Down 28%) Dirty oil is not getting funding in the US and their share price reflects this. They just added an acquisition in the Permian. He liked the management team change. They are able to grow 10-15% based on current oil pricing. He just prefers to buy in Canada where valuations are at a significant discount.
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TOP PICK
PE is an independent oil and gas producer in the Permian. EPS is expected to grow by 56% in the coming year and it trades at 52% of book value. There are currently 21 buy ratings on the company. It latest earnings reported $0.03 EPS versus consensus of of ($0.14). Plus it pays a reasonable dividend. We would trade this with an $8 stop-loss. At current prices this over 40% of upside. Yield 1.86% (Analysts’ price target is $15.83)
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PAST TOP PICK
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PAST TOP PICK
(A Top Pick Aug 25/20, Up 47.8%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with PE continues to advance and has achieved our $16 target. To be disciplined, we are recommending covering 50% of the position and trailing up the stop to $12. This would all but guarantee an minimum return of 29%.
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PAST TOP PICK
(A Top Pick Sep 01/20, Up 56.4%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with PE has resulted in the company being acquired by Pioneer Natural Resources. We are considering the position now closed at the last market closing price of $16.93. Combined with the previous recommendation to cover 50%, the total return on investment exceeded 52%.
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A Permian producer that has been doing a really good job of acquiring acreage, so they issued a ton of paper on to the market. They’ve grown 14% a quarter for the past couple of years. They now get to slow down on that and focus on delineating their acreage, and also going after some new benches. One that they think they have a command of is the Wolf Camp C, and these wells are super, super economic. Have about 70% of their production hedged next year. (Analysts’ price target is $40.)