RE:RE:BTE & MEG Good points JD.
BTE and MEG had a common base coming out of thr pandemic. They were both deeply leveraged, but he solid assets, good hedges, and no debt maturing for more than 4 years. The debt and oil crash left their share prices absurdly low - way beyond sensible. So I would think that there are many who own both based on this profile.
MEG has been doing all the right things. They were even more leveraged than BTE, so their rerate was always going to be later. In fact, my returns on money invested in those dark days are still better for BTE than MEG at 30x vs 21x. Investing with n leveraged names gives the most torque if you are right on revenue/resource prices recovering.
MEG has been extremely well run post pandemic. The lack of hedges starting last year was a brilliant move. Production was increased to 110000 BOE without too much capital spent. They have been relentlessly buying back shares and paying down debt and are in a good spot today. They are also the most obvious M&A target in Canadian O&G with CVE or CNQ loving to add those assets to their portfolio. Though this is less likely as the share price continues to appreciate which suits me fine as there are more gains to be had long term if they don't get acquired.
It's hard to run around chasing the next name that's going to rerate a bit. Pick good names and hold on. They will all get some love, sometimes at different times.
BTE is also in a great spot today. I suggest owning them both.
JohnnyDoe wrote: It's never really a sound strategy to have all your eggs in one basket
I own several cdn mid caps and a couple large caps, including MEG and BTE.
Personally I think that returns in the oil patch have been so good the past couple of years that we've become desensitized to them. I "only" made 30% last year kind of thinking