Energy prices are higher, and companies are much more disciplined and focused on shareholder returns. One thing he likes in particular is that it's still investing in the company for growth, rather than just returning capital to shareholders. Acquisition this summer is a prime jewel, will use its cashflow to to pay down debt, and that's the playbook it will follow. Yield is 5.28%, which will grow significantly when it reaches its debt target this June. (Analysts’ price target is $14.67)
Stockchase Research Editor: Michael O'Reilly We again reiterate this low cost oil and gas producer in the Montney and Duvernay shale regions as a TOP PICK. Strong free cash flow is allowing the company to aggressively retire debt and buy back shares. Recently reported earnings again beat expectations and the company trades at under 1.5x book value. We recommend trailing up the stop loss (from $7.00) to $9.25, looking to achieve $14.50 -- upside potential over 47%. Yield 4.3% (Analysts’ price target is $14.30)
Company is well run and likes company.
Has been buying shares lately.
Likes company due to long reserve life index.
Trading at ~2.7x cash flow.
Planing for a double in the share price.
Stockchase Research Editor: Michael O'Reilly We reiterate this low cost oil and gas producer in the Montney and Duvernay shale regions as a TOP PICK. As the company pays down debt, it pledges to boost dividends further -- they target 75% returned to shareholders. Recently reported earnings beat expectations by 18% and the company trades at under 1.5x book value. We continue to recommend placing a stop loss at $7.00, looking to achieve $14.50 -- upside potential over 50%. Yield 3.6% (Analysts’ price target is $14.40)
(A Top Pick Sep 24/21, Up 48%) Disappointed with returns even though have been strong.
Has sold shares since company active in M&A.
Did not want to wait for return of capital.
As company de-levers, company will have a 9% dividend yield.
A leader in Canadian light oil, and a big consolidator recently. But it's not his favourite; he's less positive about the future of the price of crude oil (though more so with natural gas). Many assets WCP purchased are older and require even more acquisitions to keep production going. Shorter-term, crude oil prices will be decent, but not sure long term.
Stockchase Research Editor: Michael O'Reilly The oil and gas producer just closed on a $1.9 billion acquisition of 32,000 boepd in the Montney and Duvernay shale regions - highly prolific areas. This gives the company another 2000 drilling locations. Recently reported earnings beat expectations by 18% and the company trades at under 1.5x book value. We recommend placing a stop loss at $7.00, looking to achieve $14.50 -- upside potential over 50%. Yield 2.8% (Analysts’ price target is $14.61)
Previous energy bear market allowed companies to right-size balance sheets, understand the value of consistency, not overgrow. Our world of desirable renewable energy sources actually creates a scarcity of oil. That's a key driver of inflation right now and won't disappear quickly. Cheap. Price momentum remains strong, raised guidance today. Yield is 4.67%, fairly low payout ratio. (Analysts’ price target is $15.38)
Has since sold shares in the company due to better opportunities.
Recent acquisition has differed return of cash flow to
Trading at ~2x times cash flow 31% free cash flow yield.
Has ability to increase shareholder returns(buybacks and dividends).
Expecting 5x multiple is reasonable on share price.
Caveat is we're getting late in the cycle. He's buying these names for the next year, not 5-10 years. Great cashflow. Accretive acquisition. Strong name, strong management.
Beat on Q2. Nice production growth and cashflow per share growth. XTO transaction looks accretive. Debt profile very nice. Likes dividend. A buy on energy prices staying put. Very nice risk/reward.
Leveraged to oil. Acquisition was highly accretive. Concern about leveraging up again. Should meet debt targets as long as oil stays above $85, and this goes hand-in-hand with increasing dividend by 65% after 12 months. Plan to double production over 2 years. Yield is 4.32%. (Analysts’ price target is $16.16)
(A Top Pick May 19/22, Down 14.9%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with WCP has triggered its stop at $8.75. To remain disciplined, we recommend covering the position at this time. This will result in a next investment gain of 0.2%, when combined with previous buy recommendations.
Whitecap Resources is a Canadian stock, trading under the symbol WCP.TO (previously WCP-T on Stockchase) on the Toronto Stock Exchange (WCP-CT). It is usually referred to as TSX:WCP or WCP.TO