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Strategies & Market Trends : Dino's Bar & Grill

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To: Goose94 who wrote (63185)	10/11/2019 8:09:16 PM
From: Goose94	Read Replies (2) of 202167

Enerplus (ERF-T) revisited top pick from Eric Nuttall on BNN.ca Market Call Friday Oct 11th @ 1200ET Enerplus is an under-levered oil producer (0.5 times debt to cash flow) with a 10-year drilling inventory in the U.S. Bakken. Trading at 3.2 times enterprise value to cash flow ($55WTI) and at 98 per cent of its liquidation value (proved developed producing reserve value) the stock is mispriced relative to its asset quality and ability to meaningfully buy back stock (it’s bought back 12.5 million shares year-to-date). Were Enerplus to use $200 million of debt to buy back shares given its distressed valuation, its leverage ratio would only increase to 0.8 times (that is, it would still have a top-tier balance sheet) and yet would allow them to buy back almost 10 per cent of their shares outstanding. When the interest level in energy stocks was higher, names like Enerplus used to trade at 8 times EV/CF. Now they trade around 3.5 times cash flow — talk about multiple compression.

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