Top Pick DetailsFirst stock in the clip. GLTA
https://www.bnnbloomberg.ca/video/shows/market-call/2024/11/21/eric-nuttalls-top-picks-meg-energy-arc-resources-and-tamarack-valley-energy/
MEG Energy (MEG TSX)
MEG is trading at a 10 per cent/14 per cent free cashflow yield at $70/$80 WTI and is returning all of it back to shareholders in the form of share buybacks. With over 35 years of stay-flat high quality inventory MEG offers oil bulls strong leverage to a rising oil price in the years ahead.
TOP PICK
MEG Energy Corp(MEG-T)
21/11/2024
Thinks it can work at $70 oil. Generates 10% FCF yield at $70 oil. Reached final debt targets, so all free cashflow should return to shareholders mostly in form of buybacks. Over the next 5 years, compounding effect should expand FCF yield from 10% to 20%. If oil goes to $80, you go from 14% FCF to 55%. Inventory depth would allow them to achieve this. Yield is 1.5%.
Update next week should allow for short covering or for $$ to come back into the name. Trades at material discount to peers.
(Analysts’ price target is $32.57)
Oil / Gas
Eric Nuttall
$26.57
Owned