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Strategies & Market Trends : Dino's Bar & Grill
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To: Goose94 who wrote (53744)4/26/2019 7:42:26 PM
From: Goose94Read Replies (1) of 202373
 
Crescent Point Energy (CPG-T) top pick from Eric Nuttall on BNN.ca Market Call Friday Jan 26th @ 1200ET

Crescent Point has successfully pivoted towards becoming a more returns-focused, shareholder-friendly company over the past year. Of all the mid-cap oil producers in Canada, they’re perhaps the best positioned and most willing to meaningfully buy back their shares using either free cash flow or proceeds from asset dispositions ($600 million of proceeds over the next several months?). Given their current valuation (3.7 times EV/CF at $60 WTI, 20 per cent FCF yield, 79 per cent of liquidation value), we see deep value that will be unlocked by the gradual improvement in sentiment towards the name. With six years of reserves that have no required capital expenditures, the company today could hedge out the next three years of production at $60 per barrel, keep production flat and buy back 60 per cent of their shares outstanding over the next three years. At that point, they would still have three years of zero-capex production ($1.8 billion of free cash flow) and about $7 billion of reserve value (at $55 WTI) versus net debt of $3.5 billion and shares outstanding at that point of 220 million: That’s $15 per share of proved and probable reserve value (using $55 WTI flat).
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