Energy Stocks 10X (March 5, 2019) Trading the Black Gold

Scott Willis and Johnny Mastromattei talk oil market trading strategies, give their opinion on oil markets and run through three oil stocks worth a look in the debut edition of Energy Stocks 10X (March 5, 2019) Trading the Black Gold.

Stock Picks

Prairie Provident Resources

Thesis: Stock has a very interesting non-oil related catalyst coming soon. Results of a NAFTA lawsuit against the U.S. government will conclude in the next few weeks. A positive outcome could add $0.15/sh of cash to a company trading for only $0.21/sh.

Prairie Provident 1 Year Stock Price - Mar 2019
Source: Yahoo Finance

Essential Energy Services

Thesis: Stock trades for $0.30/sh but has working capital net of debt worth $0.25/sh, making this a deep value play on a Canadian oil recovery.

Essential Energy Services 1 Year Stock Price - Mar 2019
Source: Yahoo Finance

Parsley Energy

Thesis: Great rocks in the Permian give the company solid growth potential in production and cashflow per share. Most importantly, the stock has net debt to EBITDA of only 1.5x, very conservative compared to many names at 3x-4x. The strong balance sheet will allow Parsley to weather the storm should oil prices go lower while the company continues to drill and grow, making them a target for a larger producer who wants exposure to the Permian.

No Debt Due Anytime Soon.

parsley-debt-maturity-schedule
Source: Parsley Q4 2018 Earnings Presentation

The opinions provided in this article are those of the author and do not constitute investment advice. Readers should assume that the author and/or employees of Capital 10X hold positions in the company or companies mentioned in the article. For more information, please see our Content Disclaimer.

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Scott has over 12 years of institutional investment management experience analyzing both debt and equity securities. He has held senior investment research roles at Credit Suisse, and TD Asset Management. His core areas of investment coverage at Grizzle include marijuana, energy and crypto. Scott is a Chartered Financial Analyst and has been featured on Bloomberg, CBC, CNBC and Macleans. Address: 682 Indian Road, Toronto, Ontario, M6P 2C9. Phone: 416-721-8257.

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