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HOLD
$10 in a year? They have under gone a management change and he likes the new team. They have sold assets, reduced operational costs, and maximizing cash flow to buy back stock. He would like to see them be more aggressive on the buyback next year. The stock trades at 3 times cash flow and at 74% of their liquidation value -- incredibly cheap. They plan to monetize some of their infrastructure and are buying back $100 million in shares by year end. He would like to see them buy back 10-15% of their shares next year to improve all metrics, while not foolishly production. Back to $10 would require a multiple of 5 times cash flow -- he is optimistic.
oil / gas
COMMENT

A takeout target? MEG-T is not his largest holding as they have more leverage than he is comfortable with. Their low cost structure and 65 years of production life, he sees them being able to de-leverage themselves back to 2 times cash flow over the next two years. The company will generate over 20% free cash yield at $55 WTI prices and $17.50 heavy oil differential. This makes them the #1 M&A target in Canada -- maybe CVE-T.

oil / gas
COMMENT

A takeout target? MEG-T is not his largest holding as they have more leverage than he is comfortable with. Their low cost structure and 65 years of production life, he sees them being able to de-leverage themselves back to 2 times cash flow over the next two years. The company will generate over 20% free cash yield at $55 WTI prices and $17.50 heavy oil differential. This makes them the #1 M&A target in Canada -- maybe CVE-T.

oil / gas
TOP PICK
A miss-priced US Bakken oil producer trading at just over 3 times cash flow and a pristine balance sheet. They have been buying back stock and increasing production with the free cash flow being generated. He would prefer to see them buy back more shares next year. Yield 1.36% (Analysts’ price target is $14.88)
oil / gas
TOP PICK
A strong sustainable dividend down to $50 WTI oil prices. Debt-to-cash flow of only 1 times. Backed by CPP, who owns 29% of the shares. Yield 8.57% (Analysts’ price target is $6.52)
oil / gas
TOP PICK
It was the gold standard in the market with a rockstar balance sheet and high yield down to $50 WTI. Over 60% of their revenue comes from liquids. The first time he has owned it as it has always been too expensive as it traded at premium mulitples -- a bargain today. Yield 10.95% (Analysts’ price target is $10.00)
oil / gas
COMMENT
Back to highs again with the expectations that the US and China will get some things done. The NSADAQ was up around 2%, with a smaller inverted yield curve. Technology, industrials and everything with China was up. Consumer stocks fell. China has only said that they would buy soy beans again. Patents and safety are another thing, and this is where they need to agree.
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