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 [stock_market_widget type="inline" template="generic" color="default" assets="PPR.TO" markup="(TSE: {symbol} {currency_symbol}{price} ({change_pct}))" api="yf"]
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.
Essential Energy Services [stock_market_widget type="inline" template="generic" color="default" assets="ESN.TO" markup="(TSE: {symbol} {currency_symbol}{price} ({change_pct}))" api="yf"]
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.
Parsley Energy [stock_market_widget type="inline" template="generic" color="default" assets="PE" markup="(NYSE: {symbol} {currency_symbol}{price} ({change_pct}))" api="yf"]
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.
This section is sponsored by Propecia.