Baytex Energy Corp (BTE.TO)

Likes prospects of energy business right now.
Expansion into Texas a good addition to inventory.
Current share price undervalued.
TMX pipeline expansion will be good for business. 

Another cheap stock of 3-4x cashflow, he'd be a buyer. Concerns about debt going into 2020, but it's been largely repaired to reach "investment grade". Great assets. Initiated a small dividend of 1%, starting to buy back stock. 

Short-term, tactical opportunity in the energy space. Money is flowing from AI into energy. Oil trading above $80 again, so technical uptrend. Value 5/10, fundamentals 4/10. Better options for new money. If you hold at a loss, ride it out a bit longer to see if you can recoup more of your losses.

Meaningful acquisition, drilling results should be ready soon. At higher oil prices, it has the highest free cashflow yield he can find. Serious upside. 10% of his fund.

Is reducing his oil exposure, especially small stocks like BTE. It's also not a low-cost producer.

Are very levered to oil prices, so if those prices rice, BTW will move up. But if oil falls, so will BTE. He prefers natural gas, because it can sustain itself through different economic environments. Among oil, he prefers names bigger than BTE.

Will continue to hold shares in company.
Major correlation in oil prices.
Solid assets with decent management team.

Didn't like this for a long time because of its balance sheet, but they have turned things around. If oil stays at these levels, its balance sheet isn't bad. Pays good shareholder returns. 35% production growth ahead. It's improving.

The chart is in a downward trend whereas most other energy stocks are trading sideways. He traded it 1 1/2 years ago. He doesn't know the fundamental reasons for the downward trend but investors should look for a base before considering buying.

His thesis is that it's the meaningful return of capital that will drive the rerating of share price. Ranger acquisition was 19% free cashflow per share accretive. Deal will close in 3 weeks, and they'll initiate modest dividend and start buying back stock. Deep value due to Ranger being misunderstood and backed by private equity.

He keeps adding. Meaningful upside. Multi-bagger potential, but you have to get past the overhang.

Highly leveraged to oil. Price of oil has been weak, but the outlook is better and BTE should enjoy some of that. Pipeline to Vancouver will benefit. Profitable. Comfortable holding or buying a bit more.

Look at a 10-year chart. Locked in a trading range for a while. Energy will be in a sideways trading range, dead money. Has potential to move to $15, but it won't be for a while, perhaps the end of 2024.

Big acquisition recently. He likes it, market doesn't. Energy has seen a big push for dividends, free cashflow, and return of capital. An acquisition may be sound strategically, but many investors don't like taking on any kind of debt. Will manage balance sheet prudently. Decent returns at current oil prices. See his Top Picks.

It all depends on execution. What does the overall asset quality end up being? Depth of inventory? What happens to commodity prices? At 82% of enterprise value, this is a very big deal for them. A show-me story. Cheaper than peers. Nice production and 9% cashflow per share share growth, which is slightly ahead of the group. 

Likes it, but safer bets elsewhere.

Ranger acquisition (Ranger Oil) misunderstood by the market.
Believes deal is accretive on a per-share basis. 
CEO recently buying back stock himself.
$70 oil would equate to $700 million in free cash flow.
Bough 4mm shares last week.
Has ownership in Clearwater play - the most economic play in North America.