John Zechner's Top Picks John Zechner, chairman and founder of J. Zechner Associate discusses his top picks: Martinrea International Inc., B2Gold, and Crescent Point Energy. Crescent Point Energy (CPG TSX) Latest purchase $5.50 – Nov/2021 The last time oil traded in the $75 range, CPG traded in the mid-teens. Since then, new management has consolidated properties and dedicated massive free cash flows to debt reduction and increased dividends.
Valuations for the energy sector have fallen to multi-decade lows as global investment funds exit the non-renewable energy names and has created a valuation gap that should lead to more industry consolidation, stock buybacks, increased dividends and other ‘shareholder friendly’ moves, even if oil prices slip a bit.
R
Patient long term investor but will pull the sell trigger in Q1 2022 if this #$%$ doesn't show any appreciation. Price was $4.76 back in June 2 and has had no meaningful movement since then. Company pays a 2% dividend with no stock appreciation. Hardly an incentive for large institutional investors to add this to their portfolio.
C
oil trading below $75 WTI is worrying, it seems like the bottom is $70, so this company is in the money right now.
S
I bought back all my shares on Friday, but looks like too early, but let's see what happens, oil may rebound a bit after market open.
T
Another top pick on BNN market call today. Oil and gas outsiders are beginning to see the value here and pile in. This will be a good Christmas for CPG shareholders.
r
I don't understand why oil prices are dropping instead of rising. Covid will also put oil production at risk as oil company workers will be locked down as well.
r
I sold all my tc energy and Enbridge shares and bought this beauty.
S
Now OPEC probably have no problem to cut production reasonably.
r
It has nothing to do with management but those investors who trade on short term profits who are selling as soon as the share price goes up only to buy it cheaper and make more money when it goes up. Eventually money from overvalued tech sector, real estate, bonds will flow in and those shorts will miss out on those huge gains.
M
Opec will ensure oil goes back up and stays that way. Meeting coming soon. As far as the supposed "variant of concern " It looks to be not so concerning.
S
spr release could cause a backlash, and good for oil price on the long term, because that oil must be filled back, and will keep oil prices higher for longer. no danger here, it's just a hype stirred by Sleepy Joe.
d
Given the number of Canadian E&P M&A action this year (mostly recently Storm Resources buyout by CNQ) surprised that no one has tried to take out CPG. Excellent metrics....selling at 50% of book value....lots of intrinsic value to unlock by taking CPG out. Time will tell but I suspect the clock is ticking for management to show real progress vice CPG share price appreciation....thats assuming the board is doing their fiduciary duty for shareholders. IMHO.
M
People are finally starting to realize just how undervalued Cpg is.
r
I think the oil price is being manipulated. The elites are concerned with Russia invading Ukraine so this is economic warfare to lower the price of oil and gas to weaken Russia which is an exporter of oil. This will recoil back.
r
A p/e ratio of 1.38. how in the world can this get any cheaper?
h
Hedges looking good right now. Crazy that market was rewarding companies without hedges a month ago. Don’t forget about downside when chasing upside. CPG cheapest stock, with excellent hedges. Should do well.
F
I'm looking for a 4 bagger minimum in the year of 2022. Jumped in today for the cruise. Thank you Canada for the opportunity
What is the impact of high inflation and a strong dollar on oil stocks?
High Inflation: Oil stocks become more desirable to investors as a protection against inflation. "Energy stocks have the best track record during periods of rising consumer prices" (Financial Post, Feb 21, 2021).
Strong Dollar: This normally means lower commodities prices (including oil). However, two factors will make it different this time (1) the unprecedented underinvestment in oil leading to tight supply while demand continues to be strong, and (2) COVID-driven high inflation is a global phenomenon, not only in the US. When that happens, there is a flight to safety from various currencies to the US dollars, making USD stronger as it is happening now. So, the current strong dollar is extraordinary.
Crescent Point anticipates its 2022 annual program, along with the recently increased dividend, will be fully funded at a low oil price of approximately US$40/bbl WTI. Assuming US$75/bbl WTI, this budget is expected to generate significant excess cash flow of approximately $925 million, after dividends, providing the opportunity to create further shareholder value.
The Company is currently prioritizing its balance sheet with its excess cash flow allocation and expects to achieve 1.0 times net debt to adjusted funds flow in early 2022 based on current forward strip commodity prices.
So buy backs in early 2022. Maybe.
h
We are talking 50 million barrels coming out of the United States, potentially another 50 from our partners. That's 100 million barrels of oil — that is one day's worth of a global demand for crude oil," Schork said. This is a joke. Before we know, Oil will be back at 85.
John Zechner's Top Picks
John Zechner, chairman and founder of J. Zechner Associate discusses his top picks: Martinrea International Inc., B2Gold, and Crescent Point Energy.
Crescent Point Energy (CPG TSX)
Latest purchase $5.50 – Nov/2021
The last time oil traded in the $75 range, CPG traded in the mid-teens. Since then, new management has consolidated properties and dedicated massive free cash flows to debt reduction and increased dividends.
Valuations for the energy sector have fallen to multi-decade lows as global investment funds exit the non-renewable energy names and has created a valuation gap that should lead to more industry consolidation, stock buybacks, increased dividends and other ‘shareholder friendly’ moves, even if oil prices slip a bit.
High Inflation: Oil stocks become more desirable to investors as a protection against inflation. "Energy stocks have the best track record during periods of rising consumer prices" (Financial Post, Feb 21, 2021).
Strong Dollar: This normally means lower commodities prices (including oil). However, two factors will make it different this time (1) the unprecedented underinvestment in oil leading to tight supply while demand continues to be strong, and (2) COVID-driven high inflation is a global phenomenon, not only in the US. When that happens, there is a flight to safety from various currencies to the US dollars, making USD stronger as it is happening now. So, the current strong dollar is extraordinary.
Feel free to add your thoughts.
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approximately $925 million, after dividends, providing the opportunity to create further shareholder value.
The Company is currently prioritizing its balance sheet with its excess cash flow allocation and expects to achieve 1.0 times net debt to adjusted funds flow in early 2022 based on current forward strip commodity prices.
So buy backs in early 2022. Maybe.
This is a joke. Before we know, Oil will be back at 85.