3 UNDERVALUED TSX Energy Stocks to Buy Todayhttps://www.fool.ca/2022/09/20/3-undervalued-tsx-energy-stocks-to-buy-today/
See my notes in
bold italic Baytex Energy
Baytex Energy (TSX:BTE) recently released its updated five-year production guidance. It includes annual production growth of 2-4% and encouraging output growth from the Clearwater play. It is one of the most economical oil plays in North America, with much lower payout periods.
Baytex Energy aims to produce 84,000 barrels of oil equivalent this year. Almost 83% of its production is liquids weighted. (They want to finish Q4 around 87,000 boe/d). So far in 2022, the company has generated a free cash flow of $367 million. It has aggressively repaid the debt with this incremental free cash, which has notably strengthened its balance sheet.
Considering decent production growth and a strong price environment, Baytex will likely see superior earnings growth for the next few years. An improving balance sheet, with little debt and a strong liquidity position, further lowers shareholder risk.
And, importantly, the stock is currently trading at a price-to-cash flow of 2.6. It is much lower than its peers and its historical average. The stock has returned nearly 150% in the previous 12 months. It will likely trade higher from current levels, given the earnings growth and expected higher oil prices.
Don't forget to count the possibility of impairment reversal but most important increase the proven and probable reserves in the area of Peavine Seal and Harmon coming at the end of 2022.
Please do your DD, it's your money !!!