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TOP PICK
The largest holding in his fund. Trading at 2.1x enterprise to cashflow. 31% free cashflow. Have pivoted to the 2 hottest plays in Canada. Clearwater exposure should give them 4.5x multiple. The balance sheet is incredible and board and management are aligned for return of capital. Could initiate a 5% dividend and 10% share buy back with 100M free cash flow remaining. (Analysts’ price target is $4.25)
oil / gas
TOP PICK
Owns 8% of the company and is the second largest holder right now. Not the most exciting holdings but they are very profitable and gives good cashflow. Well over 10 years of development drilling. 1.9x EV to 22 cashflow and 39% free cashflow yield. Expects them to initiate a healthy dividend next year. Net zero emitter. Once the balance sheet is brought back to shape, will be in a good position. (Analysts’ price target is $4.60)
oil / gas
TOP PICK
Down almost 20% this summer without any news. Management and board should be aggressive with their free cashflow. Paying down debt in the Duvernay purchase. Trading at 26% free cashflow yield. Would generate about $1B of free cashflow. A 10% share buy back would be effective. Balance sheet will be back in shape. (Analysts’ price target is $7.82)
oil / gas
COMMENT
Oil has recovered almost all the losses from the OPEC fears. OPEC production will use up spare capacity shortly. Demand growth is not faltering. Energy stocks have sold out since the OPEC meetings that has not come back. Key message is that the amount of free cashflow these companies are generating, every day that oil trades above $70 is a good day. Be a bit more patient. Companies will start messaging about what they are going to do with their free cashflow.
Unknown
PAST TOP PICK
(A Top Pick Aug 06/20, Up 114%) Was still emerging from the covid sell off last August. The royalty structure gave them the opportunity to give meaningful dividend increases. The CEO changed. The goal is to maximize upside capture right now and this does not hit his objectives right now. Wants something with more upside potential.
oil / gas
PAST TOP PICK
(A Top Pick Aug 06/20, Up 135%) The name has done well. Still miss-priced, as is the sector. Emerged from the challenging environment last year and ended up coming out of it better. Dividends have increased. Trading at 2.6x cashflow. The old multiples were 7-8 multiples. Net zero emitter so it ticks the ESG box.
Oil and Gas (Integrated Oils)
PAST TOP PICK

(A Top Pick Aug 06/20, Up 78%) Was purchased by Whitecap. Was offering very meaningful upside. Still likes the management team and would support them in the future.

oil / gas