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Strategies & Market Trends : Dino's Bar & Grill
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To: Goose94 who wrote (58793)8/30/2019 7:52:57 PM
From: Goose94Read Replies (1) of 202035
 
NuVista Energy (NVA-T) top pick from Eric Nuttall on BNN.ca Market Call Friday Sept 30th @ 1200ET

Nuvista’s stock price is down nearly 80 per cent over the past year (down 32 per cent over the past month) as the buying interest for even quality small- and mid-cap stocks has all but disappeared. With a likely TSX Index deletion (to be announced Sep. 14), hedge funds have heavily shorted the stock into what has become a vacuum of buying. The market cap of $370 million today is less than the amount they raised in August 2018 ($384 million at $8.10 per share) to buy a highly sought-after asset from Cenovus that had received six other bids.

Nuvista is trading at only 2.6 times enterprise value to cash flow (EV/CF) at $55 WTI and $2.50 NYMEX and 103 per cent of its liquidation value. The stock price has completely decoupled from the long-term value of the company. While outspending its cash flow, the company is on track to generate about $100 million of free cash flow per year in 2021 (with 15 years of proved reserves), which equals a 27-per-cent free cash flow yield. Given this stock traded over $7 a year ago, we easily see a 175-per-cent upside from current levels ($4.47), which would only be four times our 2020 EV/CF estimate at $60 WTI.
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