RE:TargetsSTEP was underperforming due to concerns related to their Tucker acquisition and the slowdown / pressure related to the U.S basin. Now with the Transmountain news, all Canadian oil E&P's and service providers are getting hammered.
In reality, the Transmountain was not going to provide any additional capacity for 3-years. So the sell-off is all based on sentiment and not activity / Capex. And with the price of oil still strong, Canadian E&P's should continue to invest in more wells and completion services.
If you look at Analyst estimates - Scotia for example, they have STEP earning Free Cash Flow (after all CAPEX) of $161 M in 2019.
Let's say they only hit $130 M.
That's a 29% FCF yield!
That's a stock trading at 3.5x FCF!
They could theoretically buy all their shares back in 3-years at this price if they wanted to (in reality I know they couldn't with Arc and would have to pay a premium for all remaining shares).
I have continued to load up at these levels and believe that the stock will eventually align to the company fundamentals and the numbers they put up.
And the kicker - if gas prices ever decide to get moving again - watch out!