MEG Energy Corp (MEG.TO) Buy, Sell or Hold

MEG Energy Corp (MEG.TO)

30.89

+0.22 (0.72%)

as of Nov 14, 2025, 9:00:00 pm Market Open.

258 watching

TOP PICK

They have paid down debt, but their balance sheet is not yet where investors want. Their assets were in demand from Husky. If oil prices strengthen, he does not expect this to exist for long since it is a big cashflow machine. It is hedge-fund heavy but he would buy a little if you are bullish on oil. (Analysts’ price target is $3.99)

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BUY

A leverage play on heavy oil. It remains a core holding and he just bought another tranche yesterday. Demand for Canadian heavy oil is set to rise. The company has good capacity to bring it to the Gulf coast. The valuation is compelling with good cash flow. Oil at $50-$60 would mean this stock could double.

PAST TOP PICK

(A Top Pick Aug 30/19, Down 21%) He sees a supply shortage in global oil. The call on oil is only going to grow. They have 60+ years of reserves, and they are ready to go down in the Gulf Coast. Free cash generation is positive.

WATCH

The biggest impact is the price of crude. If we continually see it improve, then this one has significant leverage to the price of oil. If it does not, then others will outperform this one.

PAST TOP PICK

(A Top Pick Aug 30/19, Down 24%) Still one of only a dozen core holdings he has. They are sitting on a world-class asset. They are roughly 55% hedged on production this year at $59 oil. They really need about $44 oil to be successful. They are levered, but have refinanced and it is not due until 2024. He is a bull on oil, thinking we will get back to $50 by year end.

TOP PICK

3.86 They have a lot of financial leverage, but one of the best hedge books. They have 2/3 of their production going to the US Gulf Coast. This is the single best candidate for a large cap company to acquire a smaller cap like MEG. Once you get more bullish on oil prices, others will see good value. Meanwhile it is a good beta way for trading institutions to play oil. Yield 0% (Analysts’ price target is $3.86)

DON'T BUY

CPG-T vs. MEG-T. Oil is the most important part of the Canadian economy. He would not touch either of these stocks. Both have leverage and are in financial distress. Oil is almost trading for free. Storage is getting full. It is very costly to shut down an oil sands well, and to almost the same extent to shut down a conventional well. Companies pump the crude even if they almost give it away. Neither of these companies have downstream refineries.

COMMENT

ATH vs HSE vs MEG? The clear stand out is MEG, who is 55% hedged at $59 oil prices. ATH has a high cost project with Hangingstone and is burning cash, although they have enough liquidity for the next 9 months. He would never own HSE, because of their ESG issues. All bets are off for all of them if $25 oil prices remain in 2021.

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PAST TOP PICK

(A Top Pick Apr 26/19, Down 62%) A high quality asset holding. It remains a core holding and he loves how management is operating through these difficult times.

TOP PICK

They have a very good hedge book -- 55% hedged at $59 WTI. When oil prices recover back to normal it will become one of the top takeout targets. Yield 0% (Analysts’ price target is $3.98)

PAST TOP PICK

(A Top Pick Apr 26/19, Down 4%) They are 70% hedged at $60 WTI for the first half of the year -- this may be helping them hold their value relative to peers right now. They still generate $250 million of excess cash flow at $47 oil prices. They have 30 plus years of reserves and are trading at 80% reserve blow down values.

TOP PICK

It has 68 years of reserves and are 70% hedged for the first half of this year at $60 oil prices. They have many billions in tax losses that could be very valuable to a large international player. He thinks it could trade back up to $9 with normalized oil prices towards $60. Yield 0% (Analysts’ price target is $8.49)

PAST TOP PICK

(A Top Pick Mar 08/19, Up 33%) There has been a massive buyer in the market for this stock. He sold out in December and just re-bought at around current price levels. It has direct exposure to heavy oil price strengthening. Crude by rail rates are increasing and is allowing heavy oil inventory to begin dropping. They are using their free cash flow to pay down debt rapidly. They have 68 years of production inventory. He thinks they will become a take out target by a large oil player soon. The stock price could go to $9-$10.

BUY

They are the number one target in Canada for M&A. There are a list of potential acquires where it makes a lot of sense. They have enormous tax pools. It is trading at a 29% free cash flow yield. They are over levered. He sees a 25% upside from here.

COMMENT

Cenovus or MEG? He likes MEG for the prospect of M&A. They have great tax pools and is deeply discounted. CVE provides exposure to heavy oil production and Alberta monetizing their rail position. He would prefer MEG, because of its relative valuation. Both have a good investment case.

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MEG Energy Corp (MEG.TO)