MEG Energy Corp (MEG-T)

Very defendable business in current oil price environment. Massive resource depth. US shale is in its twilight, which means they'll eventually have to come to Canada. Very healthy FCF yield. Buying back lots of stock. 

At least 35 years of stay-flat inventory. Superbly high-quality asset. Good balance sheet. Sold off on tariff concerns. He has lots of confidence in medium- and long-term outlook. Full position in his fund.

One of his largest holdings. It has sold off from tariff worries, just hitting a one-year low. They have 35 years of stay-flat inventory. Over 5 years, will grow production 25% while buying back half their shares as they pay a dividend. At $70, will trade at 4x cash flow and 13% free cash flow yield. At $80, they could buyback 80% of shares over 5 years. Is way oversold. Targets $30 in a year.

Are buying back lots of shares. Option premiums are decent. Likes it.

Thinks it can work at $70 oil. Generates 10% FCF yield at $70 oil. Reached final debt targets, so all free cashflow should return to shareholders mostly in form of buybacks. Over the next 5 years, compounding effect should expand FCF yield from 10% to 20%. If oil goes to $80, you go from 14% FCF to 55%. Inventory depth would allow them to achieve this. Yield is 1.5%.

Update next week should allow for short covering or for $$ to come back into the name. Trades at material discount to peers.

Looks good. He got a weekly buy on this 2 weeks ago, and a monthly buy would be more substantial (the more you go out, the better it is.) Short term, hitting resistance. Once it gets through $28.40, it will probably play out with what he sees in the longer-term charts, which look quite good.

Believes company is reaching final debt target in ~October 2024. Will pivot to 100% return of capital. Trading at 11% free cash flow yield at $70. Expecting a $40 share price at $80 oil. Large amount of reserves that will allow company to continue excellent capital allocation strategy. Continued share buybacks are very good for investors. Market currently ignoring hidden value in company. 

His thesis is 35 years minimum of stay-flat inventory, 14-16% free cashflow yield for 2025-26, soon to pay down as much debt as it needs to. Inflecting imminently to 100% return of capital. If you're bullish on oil, sit on it and collect the modest dividend. Two years out, sees $45 target at $80 oil.

More defined uptrend than other charts, starting to pull back. Might pull back to the trendline, but by just a few percentage points, not a crash and burn on the sector. Great point to add to or start positions.

He doesn't own any exploration & production companies, too tied to price of oil. If he were to invest, CNQ would be his top choice. The world needs Canadian oil, and now they can get it with the Trans Mountain expansion. 

Has taken profits, because the CEO changed (whom he's met), but really it was due to valuation, which has risen with the share price. He sees less, but still decent upside in this. Likes their long-dates reserves, good free cash flow yield and benefits from the WCS differential. Foreign investors will return to Canadian energy stocks when they realize that shale producers have inventory challenges (weak quality and quantity). He targets $42-43. They will be debt free in Q2, he expects.

His biggest holding though has reduced it. Trades at 13% free cash flow yield, so as shares have risen, that yield has declined. The new CEO looks capable and he remains bullish MEG. He expects a change in Ottawa next year which will be reduce political risk. Meg should hit its debt target in Q3 which could trigger share buybacks. He targets $42 or 31% upside.

He likes it since it has long life reserves of 50 years and a good balance sheet. The world will need energy security, therefore oil and gas production will still be needed. It has had a great run so Cenovus looks a bit cheaper.

One of the best-performing Canadian energy stocks so far this year. An intermediate oil producer. Is always talk of it getting taken over by Suncor  or a U.S. company. It holds long-life, low-decline assets. He sees 25-30% upside.

Heavy oil company with very long reserve life index. Likes strategy of management. Producing very high cash flows. No cash taxes. Worried about acquisition target, but would require a premium to share price. Strong CEO with excellent track record.