Nuttall Comments COMMENT
The Eric Nuttall stock-picking code.(A Commentary)
10/07/2024
The Eric Nuttall stock-picking code.
Biggest metrics he looks at is free cashflow yield at $80 oil, $4 natural gas, $12.50 WCS differential in 2025. He then looks at how many years of inventory a company has. What are other catalysts?
Then look at what target free cashflow yield should it be, and this is tough to figure out. In the past, he'd have said 10%, but US companies are trading at 6-8%, and Canadian companies are better. Shale companies are challenged, and this is becoming more obvious. So he thinks Canadian companies will trade at a premium to US companies. So now he thinks an 8% free cashflow yield, getting it back via buybacks or dividends.
Then he can get a theoretical target price on every company he models.
Right now, he's very bullish on oil, especially heavy oil. Bullish, long-term, on natural gas. Quite bullish on services, especially drillers.