Opinions The Monthly Gems by Allan Tong
Whitecap ResourcesWCP.TOTOP PICKApr 01, 2025
Stock price when the opinion was issued
As of Sep 22, 2026. Market Open.
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The caller wondered about taking profits in this company. You could take a pause for a gas related stock but WCP is still very strong with a lot of production over a diverse number of regions. He would sell half and take profits, but keep half. He thinks that oil stays at $100 per barrel for the rest of the year.
Would name it top pick again. Based on $70 WTI, WCP has 20% upside to $22.50; at $80, it's $26. He wouldn't be surprised if WCP was bought out. WCP has a super inventory in the Montney and Duvernay and at least 17 years of stay-flat inventory. The CEO always buys shares on weakness, strong balance sheet and pays a dividend of 4%. Modest growth.
Eric NuttallAfter consolidating this year, it has broken out. A pullback is possible, but an opportunity. He likes it for the long term.
Keith RichardsIt is a mid-cap oil stock and their largest holding. It is one of the most misunderstood companies and is cheap without reason. Management has done an awesome job in its operations and it has beaten expectations in many quarters. It has well over 2 decades of very high quality inventory. US companies are eyeing Canadian companies Whitecap has 5.3 times cash flow and he sees a 40 % upside. Pays a dividend.
Eric Nuttall
27% gas, the rest is oil. Now the 5th largest oil producer in Canada. Market cap of $20B. Extremely well run. Lots of contiguous land, long reserve life. Probably one of the strongest takeout candidates. Trades ~5x cashflow, with considerable upside.
With ARX being taken out, more institutions will be interested. Yield is 4.6%.
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Premium contentWCP boils down whether you expect the US-Iran war will continue or end soon. Unfortunately, we expect it to drag on, given the pattern of ceasefire-fighting-ceasefire. The fact is Iran controls the Strait of Hormuz and the flow of crude oil. Trump can do little to change that except threaten. Even if the war completely stopped in August, sweeping the strait of mines could take six month and returning to normal shipping volumes could take 18 months or more. All this puts oil companies in the driver's seat as crude oil prices will not return to sub-$60, pre-war levels and likely will fall no lower than $70, as we saw a month ago.
He has owned a lot of this. They bought a company last year and integrated very well. The outlook remains solid. Then, the Iran War spiked energy prices. He's been trimming WCP at $16-19. Buy at $11-12. He expects price targets to decline.
Bruce MurrayThe oil floor has risen since the US-Iran war, but alot of supply will come in soon. The oil price will test $70. Sanctions lifted, Iran can sell at market prices. Canadian producers are well-positioned. The CAD is at 70 cents, which means C$90 a barrel (based on US$70 barrels). He likes WCP; they've consolidated into a sizable-enough player.
Loves the story. Lightened up on potential Iran deal. But on weakness (~$14-14.50), he'd be inclined to come back in. VRN acquisition was extremely timely. Good operators. One of Canada's premier oil plays. Likes management.
John ZechnerAll-time high today. Meaningfully mispriced. Top assets in Montney and Duvernay. Sell your ARX right now and buy this. Continues to beat quarter after quarter after quarter. CEO has the most aggressive insider buying of any company he follows in Canada.
Potential takeover (but, he really hopes, not anytime soon). Yield is 4.48%.
Eric Nuttall
WCP has a book value yield of 104.9% and an earnings yield of 12.8%, both good, while it pays a 7.8% dividend yield based on a decent 53.65% payout ratio, and trades at a low 6.88x PE. Compare that to CNQ's 15.33x and Suncor's 11.6x. The street likes the deal, giving WCP an average price target of $13.36, or 42% higher, based on six buys and one hold. Obviously, the street gives the merger a thumbs up, with three analysts assigning an average price target of $13.00, including one upgrade.