Nuttall DetailsFirst stock in the clip. GLTA
https://www.bnnbloomberg.ca/video/eric-nuttall-s-top-picks~2192589
Athabasca Oil (ATH TSX)
I recently purchased 9.9 per cent of the company directly from Equinor (formerly Statoil) when oil was ~$53 believing that we would see $60 by June (paid $0.18). Athabasca Oil offers unrivaled leverage to a rising oil price with free cashflow increasing by 10X with an oil price increase from $50 to $60. At current oil prices and differentials Athabasca Oil trades at 2.3X EV/CF and a 31 per cent free cashflow yield. Given strong oil prices and accommodative high yield markets we are optimistic that Athabasca Oil will be successful in refinancing maturing debt in the next few months making it more “investable” to the masses. Our target multiple of 4x EV/CF would imply a $0.93 target at $60WTI and $1.91 target at $70WTI offering potential upside of 86 per cent to 282 per cent. There is risk in their refinancing so I do not consider this a “widows and orphans” stock.
TOP PICK
Athabasca Oil Sands Corp
(ATH-T)
April 30, 2021
No one is looking in the small cap where there are huge opportunities. Still see meaningful upside. $60 oil means their free cashflow goes up by 10x. At $60 oil, it would generate $144M of free cashflow. Leveraged to the oil price. 54% free cashflow yield and the name would trade at a 3x multiple. Could go to $0.90 share price. At $70 oil, could go above $1.00. Must refinance debt but expects positive outcomes. There is some risk. (Analysts’ price target is $0.47)
OIL/GAS
Eric Nuttall
Price
$0.600
Owned
Yes