Great post from Leanne on Energy Stocks IV Re: JOY - Q1
JOY had a decent Q and without hedges the value proposition is clear as they get down below 2X D/CF by YE21. I model 40c FCF in 2022 with a maintenance capital budget for drilling. On a 90c stock that would normally be quite eye popping but today many sleepy generalist investors seem unaware of these small-cap opportunities. Off the top of my head think power plant and natural gas assets at Countess should $6M in 2021.(which can be increased) There really is only half dozen heavy oil torquey small cap names that could be multi-baggers with $70+ oil plus the potential for a Nuttal bump if/when he chews through more small-cap jr names as targets are met in names that have already moved. JOY is ripe for M&A as management appears to be a motivated seller, as the b/s organically repairs itself more interest will develop in the name. Either way JOY is a name I do not expect to be around in its present form in 2022. I think AIMCo will work with Journey on its debt repayment schedule as they see the cash flow generation of JOY at $65 oil. At some point it wont be normal to talk about energy stocks that trade under <1.5X price to cash flow!