Opinions Michael Smedley
PrairieSky RoyaltyPSK.TOBUYFeb 22, 2016
Stock price when the opinion was issued
As of Jun 05, 2026. Market Open.
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Exceptionally well run. All-time high today. His struggle has always been what's the fair multiple on a royalty company? Trades at 19.5x PE, 18x for next year, and FCF yield is 5% (not compelling). Yield is 3%.
He owns some in his income fund. If you're really bullish on oil, royalty is not the way to go.
Eric NuttallStrong performer over past several years, so trades at fairly high multiple (for example, twice that of FRU earlier this year). Extraordinarily good exposure to the Clearwater, good job with its business model. He struggles with what a fair multiple is. About 10% upside from here, and that doesn't do it for him. Yield is 3.8%, not overly compelling.
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Premium contentOur PAST TOP PICK with PSK has triggered its stop at $23. To remain disciplined, we recommend covering the position at this time. This will result in a net investment gain of 27%, when combined with our previous recommendations.
FRU is such a low-cost producer, it hasn't benefited as much as marginal producers have in the uptick in oil/gas prices. So its margins haven't increased as much. FRU asset package is so good, he's happy to own it despite this year's price action. He likes both names.
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A massive land holder in Western Canada who just made another massive acquisition. The dividend (6.3%) could be cut under current pressures, however. You have to be in the sector. A dividend cut is probably largely discounted in the stock price.