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Strategies & Market Trends : Dino's Bar & Grill

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To: Goose94 who wrote (63184)	8/30/2019 7:55:16 PM
From: Goose94	Read Replies (1) of 202372

Crescent Point Energy (CPG-T) revisited top pick from Eric Nuttall on BNN.ca Market Call Friday Sept 30th @ 1200ET Crescent Point is trading at 2.8-times EV/CF, at 20 per cent free cash flow yield (2020) and at 71 per cent of its liquidation value (PDP reserve value) despite having six years of capex-free production already on stream. With a potential sale of some infrastructure assets ($50 million of EBITDA at 7 times equals $350 million), we believe the company will use the majority of proceeds to pay down debt (to get to 1.8-times debt to 2019 cash flow) while using the remaining 33 per cent to buy back its shares, given the distressed and highly attractive valuation (26 million shares equals 5 per cent of shares outstanding). With a very strong balance sheet, we look for the company to initiate a meaningful 2020 share buyback program for up to 20 per cent of their shares outstanding while keeping production flat (that is, 20-per-cent production growth per share). A 5-times target EV/CF multiple at $60 WTI equals to a $12.67 share price or 195-per-cent upside.

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