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Latest Top Picks

Stock Opinions by Eric Nuttall

TOP PICK
Always had too much debt, heavy oil, etc. and now they are going into the Clearwater play. They acquired a massive position and drilled the 2 best wells and got cashflow back in a month. Trading at material discount and changing rapidly. Committed to being a strong returner of capital. (Analysts’ price target is $4.83)
oil / gas
TOP PICK
A pure play in the Cleawater area. Have made several successful explorations. Good insider ownership. 2.8x cashflow two years out. 28% free cashflow at $70 oil. A proven value creator with no balance sheet risk. (Analysts’ price target is $7.24)
oil / gas
TOP PICK
A potential double from here. Trading at 2.6x cash flow. Free cashflow is 23%. Buying back shares due to distressed value. Has 10 years of inventory. Balance sheet is good. Could privatize themselves in 4 years. 99% upside potential. (Analysts’ price target is $16.24)
oil / gas
PAST TOP PICK
(A Top Pick Nov 20/21, Up 69%) Liked it for assets. Ultimately sold to Whitecap.
oil / gas
PAST TOP PICK
(A Top Pick Nov 20/21, Up 104%) 21% free cash flow yield, and have committed to return a decent amount to shareholders. Injecting CO2 which is the biggest project in Canada. Waiting for framework on government on how producers can become net zero emitters.
Oil and Gas (Integrated Oils)
PAST TOP PICK
(A Top Pick Nov 20/21, Up 217%) You get leverage to a rising oil price since it is unhedged. Has differential exposure to WCS differentials. At $80 oil, they will reach their next hurdle for cashflow. Upwards of 20% of shares being retired every year. Could privatize themselves in a couple years with cashflow. Target of a 6x multiple.
oil / gas
COMMENT
Has been a rollercoaster for energy investors. Fundamentally, nothing has changed. SPR release weighed down, and now there are fears for Omicron. The collapse in oil price is discounting 7M barrel per day collapse. This is equivalent for all planes on the planet not flying for months. The average Canadian oil company could privatize themselves with 5 years of cashflow. Would continue to be aggressive in oil.
Unknown
COMMENT
Heading towards to an energy crisis. There is a lack of investment in the space. Investors want returns and there is pressure from ESG. The themes are still intact for a supply crunch.
Unknown
BUY
Everyone wants higher prices. The easiest way to drive re-rating in stock price is to meaningfully buy back stock. Wants to get debt free and then return capital after. They should be debt free by mid-next year and then they should return the majority of cashflow to investors. 13% free cashflow yield.
oil / gas
BUY
They had finance fears for their notes that were due. Now they have good leverage to rising prices. You are buying for the oil sands assets. Now, they also have huge tax losses that can be useful. Selling at 1x free cashflow if you give value to the tax losses. There is still good upside and is still a meaningful shareholder.
oil / gas
DON'T BUY
Has gone through a couple iterations. Paid down debt through selling assets. If the company cannot return meaningful capital back, there is no catalyst. It is not attractive enough for him.
oil / gas
DON'T BUY
Not bullish on gas due to its relation with weather. Could see 46% upside, but other names have more potential. Look for cheaper multiples.
oil / gas
WAIT
Owns 6%. If it does not get included in TSX, it would see some selloff and he would buy there. They have good assets in Charlie Lake and Clearwater. Perfectly aligned with returning meaningful returns of capital to shareholders. Wants to clear debt. 2.7x cashflow right now.
oil / gas
DON'T BUY
Thinks the CEO is not doing a great job. A value trap. Have owned it in the past, but has moved one. Better alternatives out there.
oil / gas
PARTIAL BUY
Mostly a story on production volume rather than cap-ex spending. Free cashflow is roughly at 15%. Relatively stable. Does not own any service names, but if he were to buy into the space, this would be at the top of his list.
oil / gas
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