Cardinal Energy Ltd | StockChase
76
Cardinal Energy Ltd (CJ-T)

Last Price Recorded: $5.1000 on 2018-06-16

ON STOCKCHASE SINCE Jan 2014

oil/gas
76
Cardinal Energy Ltd (CJ-T)

Last Price Recorded: $5.1000 on 2018-06-16

ON STOCKCHASE SINCE Jan 2014

oil/gas

Cardinal Energy Ltd


Signal Opinion Expert
HOLD

He has said to buy it for the yield as he does not expect a high capital appreciation.  Its yield has retreated to about 8%.  It is trading 3.6 times EBITDA at $70 oil and could return to $10 per share.  They have only moderate leverage towards higher discounted oil prices, unfortunately they have too little liquidity to attract large investors.  Yield 8%. 

oil/gas

He has said to buy it for the yield as he does not expect a high capital appreciation.  Its yield has retreated to about 8%.  It is trading 3.6 times EBITDA at $70 oil and could return to $10 per share.  They have only moderate leverage towards higher discounted oil prices, unfortunately they have too little liquidity to attract large investors.  Yield 8%. 

oil/gas
Eric Nuttall

Partner & , Ninepoint Partners...

Price Price
$5.350
Owned Owned
Unknown

PARTIAL BUY
Cardinal Energy Ltd(CJ-T) 

April 17, 2018

The caller asked how the company can pay out more dividend than it earns. Mr. Nuttall explained that there can be a mismatch between earnings and cash flow based on when the company books its costs of land and exploration. From a cash flow perspective, using strip pricing, he sees their dividend at about 33% of cash flow. The 9% dividend of Cardinal is completely sustainable, from the perspective of cash flow. If you look at cash flow minus maintenance capex, you see free cash flow of 18%. It is rare to find a business with an 18% free cash flow yield. From the perspective of a dividend-oriented investor, this is a good stock with good exposure the oil market. However, from the perspective of capital appreciation, other companies will grow faster. He acknowledges that companies like Cardinal are perceived to have abandonment liabilities, but he isn’t as concerned about them as he thinks the rest of the market is. He expects a total return in the mid-teens.

oil/gas

The caller asked how the company can pay out more dividend than it earns. Mr. Nuttall explained that there can be a mismatch between earnings and cash flow based on when the company books its costs of land and exploration. From a cash flow perspective, using strip pricing, he sees their dividend at about 33% of cash flow. The 9% dividend of Cardinal is completely sustainable, from the perspective of cash flow. If you look at cash flow minus maintenance capex, you see free cash flow of 18%. It is rare to find a business with an 18% free cash flow yield. From the perspective of a dividend-oriented investor, this is a good stock with good exposure the oil market. However, from the perspective of capital appreciation, other companies will grow faster. He acknowledges that companies like Cardinal are perceived to have abandonment liabilities, but he isn’t as concerned about them as he thinks the rest of the market is. He expects a total return in the mid-teens.

oil/gas
Eric Nuttall

Partner & , Ninepoint Partners...

Price Price
$4.740
Owned Owned
Unknown

COMMENT
Cardinal Energy Ltd(CJ-T) 

March 15, 2018

Pays a 10% yield, so, is there a flaw here? No. They generate enough cash to cover it, and they can still grow production 7-8% annually and can pay down debt which is manageable. He personally encourages them to do a 10% share buyback.

oil/gas

Pays a 10% yield, so, is there a flaw here? No. They generate enough cash to cover it, and they can still grow production 7-8% annually and can pay down debt which is manageable. He personally encourages them to do a 10% share buyback.

oil/gas
Eric Nuttall

Partner & , Ninepoint Partners...

Price Price
$4.360
Owned Owned
Unknown

HOLD
Cardinal Energy Ltd(CJ-T) 

March 12, 2018

All these companies have been creamed.  They don’t have too much heavy oil.  They are all getting painted with the same brush.  The company could cut the dividend to fund a buy back or do an acquisition, but the fundamentals continue to look good.

oil/gas

All these companies have been creamed.  They don’t have too much heavy oil.  They are all getting painted with the same brush.  The company could cut the dividend to fund a buy back or do an acquisition, but the fundamentals continue to look good.

oil/gas
Ryan Bushell

President, Newhaven Asset Manag...

Price Price
$4.190
Owned Owned
Unknown

TOP PICK

Canadian oil producer.  10% yield that is sustainable.  It trades at a material discount to its average.  Cash flow per share has not gone down but the share price has.  You can’t stay this negative for long.  (Analysts’ target: $6.35).

oil/gas

Canadian oil producer.  10% yield that is sustainable.  It trades at a material discount to its average.  Cash flow per share has not gone down but the share price has.  You can’t stay this negative for long.  (Analysts’ target: $6.35).

oil/gas
Dennis da Silva

Managing D, Middlefield Capital ...

Price Price
$4.190
Owned Owned
Yes

COMMENT
Cardinal Energy Ltd(CJ-T) 

February 9, 2018

Cardinal Energy (CJ-T) vs Torc Oil & Gas (TOG-T). Very different companies. Cardinal is a medium gravity producer. They are 60% exposed. They are going to lower their debt. They can pay the 10% yield and that is sustainable. He would buy Cardinal Energy (CJ-T) vs Torc Oil & Gas (TOG-T). (Analysts’ price target is $6.44) 

oil/gas

Cardinal Energy (CJ-T) vs Torc Oil & Gas (TOG-T). Very different companies. Cardinal is a medium gravity producer. They are 60% exposed. They are going to lower their debt. They can pay the 10% yield and that is sustainable. He would buy Cardinal Energy (CJ-T) vs Torc Oil & Gas (TOG-T). (Analysts’ price target is $6.44) 

oil/gas
Eric Nuttall

Partner & , Ninepoint Partners...

Price Price
$4.160
Owned Owned
Unknown

WAIT
Cardinal Energy Ltd(CJ-T) 

February 5, 2018

They are on her watch list.  They have a very low decline rate compared to peers, but they are not as light oil-focused as she likes.  They want to move this way as well as to reduce debt.  She is waiting to see what happens after a CFO change.

oil/gas

They are on her watch list.  They have a very low decline rate compared to peers, but they are not as light oil-focused as she likes.  They want to move this way as well as to reduce debt.  She is waiting to see what happens after a CFO change.

oil/gas
Joanne A. Hrusk

Market Str, Integral Wealth Secu...

Price Price
$4.350
Owned Owned
No

COMMENT
Cardinal Energy Ltd(CJ-T) 

January 5, 2018

The company is exceptionally strong. The last time he stress tested the dividend, it was sustainable down to about $47 WTI, so at the current $59, not only can they pay the dividend, but can grow production. However, you could massively underperform by having money in a name that is going to languish, such as this name. It is absolutely cheap, and thinks they can grow production by 12% and pay the 8.5% dividend and still generate free cash flow. They are trying to monetize more royalties, hopefully by the end of this quarter. Because it is going to underperform other names he does not have any shares.

oil/gas

The company is exceptionally strong. The last time he stress tested the dividend, it was sustainable down to about $47 WTI, so at the current $59, not only can they pay the dividend, but can grow production. However, you could massively underperform by having money in a name that is going to languish, such as this name. It is absolutely cheap, and thinks they can grow production by 12% and pay the 8.5% dividend and still generate free cash flow. They are trying to monetize more royalties, hopefully by the end of this quarter. Because it is going to underperform other names he does not have any shares.

oil/gas
Eric Nuttall

Partner & , Ninepoint Partners...

Price Price
$4.910
Owned Owned
No

COMMENT
Cardinal Energy Ltd(CJ-T) 

December 21, 2017

They started looking at oil & gas a little bit more. This would be on the riskier side of centre. Thinks it’s a little bit too early. Return on capital still negative. Looks cheap but there is quite a bit of debt. A lot of things could go in their favor or a lot of things could go the other way. That’s going to be one of those that’s either going to be spectacular or it’s going to flame out. Depending on your risk tolerance it’s probably best to take a small position and see how it goes.

oil/gas

They started looking at oil & gas a little bit more. This would be on the riskier side of centre. Thinks it’s a little bit too early. Return on capital still negative. Looks cheap but there is quite a bit of debt. A lot of things could go in their favor or a lot of things could go the other way. That’s going to be one of those that’s either going to be spectacular or it’s going to flame out. Depending on your risk tolerance it’s probably best to take a small position and see how it goes.

oil/gas
Matt Kacur

President, FSA Financial Scienc...

Price Price
$4.900
Owned Owned
Unknown

PAST TOP PICK
Cardinal Energy Ltd(CJ-T) 

November 15, 2017

(A Top Pick Oct 7/16. Down 44%.) One of the few Canadian names he has actually added to recently. Oil is down about 1%, while this name is down 57%. Over that time period, they did an acquisition. The balance sheet has always been pretty good. Yielding 8.9%, which is sustainable.

oil/gas

(A Top Pick Oct 7/16. Down 44%.) One of the few Canadian names he has actually added to recently. Oil is down about 1%, while this name is down 57%. Over that time period, they did an acquisition. The balance sheet has always been pretty good. Yielding 8.9%, which is sustainable.

oil/gas
Eric Nuttall

Partner & , Ninepoint Partners...

Price Price
$4.690
Owned Owned
Yes

SPECULATIVE BUY
Cardinal Energy Ltd(CJ-T) 

September 15, 2017

If looking to clip a dividend coupon, the estimate is that it is sustainable down to about $45 oil. The dividend yield is high, because the stock’s been slaughtered on an overhang. The overhang was because RBC determined there was enough demand to do a fairly significant bought deal at $5.50, for them to buy an asset off of Husky. RBC had overestimated the market’s demand for Canadian small caps. It is back to a level now where it is extraordinarily cheap. He struggles trying to figure out where the big guys want to come in and bid it up. They’ve had too many stumbling blocks in order for you to get super excited. Dividend yield of 9.74%.

oil/gas

If looking to clip a dividend coupon, the estimate is that it is sustainable down to about $45 oil. The dividend yield is high, because the stock’s been slaughtered on an overhang. The overhang was because RBC determined there was enough demand to do a fairly significant bought deal at $5.50, for them to buy an asset off of Husky. RBC had overestimated the market’s demand for Canadian small caps. It is back to a level now where it is extraordinarily cheap. He struggles trying to figure out where the big guys want to come in and bid it up. They’ve had too many stumbling blocks in order for you to get super excited. Dividend yield of 9.74%.

oil/gas
Eric Nuttall

Partner & , Ninepoint Partners...

Price Price
$4.300
Owned Owned
No

HOLD
Cardinal Energy Ltd(CJ-T) 

August 24, 2017

It pays a 9.8% dividend.  They bought a company a few months ago and did a big capital raise.  With these companies you need the energy price to support you.  They can pay out this dividend for a few more quarters yet.  He anticipates some relief this winter.

oil/gas

It pays a 9.8% dividend.  They bought a company a few months ago and did a big capital raise.  With these companies you need the energy price to support you.  They can pay out this dividend for a few more quarters yet.  He anticipates some relief this winter.

oil/gas
Rick Stuchberry

Portfolio , Wellington-Altus Pri...

Price Price
$4.260
Owned Owned
Yes

TOP PICK
Cardinal Energy Ltd(CJ-T) 

August 17, 2017

It is an oversold E&P.  They did a financing that got messed up and then repriced.  The circumstances really floored the stock price.  It has almost a 10% yield, but it is not a red flag.  The issue was at $5.75.  Fundamentals will drive it higher.  (Analysts’ target: $6.75).

oil/gas

It is an oversold E&P.  They did a financing that got messed up and then repriced.  The circumstances really floored the stock price.  It has almost a 10% yield, but it is not a red flag.  The issue was at $5.75.  Fundamentals will drive it higher.  (Analysts’ target: $6.75).

oil/gas
Bruce Campbell

President, Campbell and Lee Inv...

Price Price
$4.080
Owned Owned
Yes

TOP PICK
Cardinal Energy Ltd(CJ-T) 

August 10, 2017

They did an acquisition, which was the right thing for them to do.  They needed to get more light oil.  They got bigger, lighter and got more drilling locations.  Energy is out of favour.  The underwriters judged the market incorrectly.  Given how much the stock has pulled back, he sees tremendous value here.  It has a 10% dividend.  If oil gets above $50 you have a lot of torque and there has been a lot of insider buying in the last few days.  (Analysts’ target: $7.00).

oil/gas

They did an acquisition, which was the right thing for them to do.  They needed to get more light oil.  They got bigger, lighter and got more drilling locations.  Energy is out of favour.  The underwriters judged the market incorrectly.  Given how much the stock has pulled back, he sees tremendous value here.  It has a 10% dividend.  If oil gets above $50 you have a lot of torque and there has been a lot of insider buying in the last few days.  (Analysts’ target: $7.00).

oil/gas
Robert Lauzon

Deputy Chi, Middlefield Capital ...

Price Price
$3.910
Owned Owned
Yes

PAST TOP PICK

(A Top Pick July 29/16. Down 42.97%.) If you believe in $55 oil, $9 would be a very reasonable price for the stock. The company just did an acquisition which was not very well received. Selling at really cheap levels.

oil/gas

(A Top Pick July 29/16. Down 42.97%.) If you believe in $55 oil, $9 would be a very reasonable price for the stock. The company just did an acquisition which was not very well received. Selling at really cheap levels.

oil/gas
Eric Nuttall

Partner & , Ninepoint Partners...

Price Price
$4.910
Owned Owned
No

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