Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Eric Nuttall
Eric Nuttall

BNN MARKET CALL

Three top stock picks from Sprott Asset’s Eric Nuttall Add to ...

Eric Nuttall is a portfolio manager with Sprott Asset Management. His focus is oil and gas stocks.

Top picks:

Torc Oil & Gas

Most recent purchase was January 10 at $10.35

Spending less than 1-times cash flow, TORC is set to grow production by 10% and pay a dividend equivalent to a 5.3% yield. Exploration results if positive in the next 2 months could lead to an increase to guidance and a dividend increase later in 2014.

More Related to this Story

Alexander Energy

Most recent purchase was December 21, 2013 at $0.49

A bet on the team, this is their third iteration after successfully building and selling two oil companies. Expect this team to use their currency to exploit the over-saturated divestiture market and be able to make several highly accretive deals in 2014. This is a stock to own for a few years.

Cardinal Energy

Most recent purchase was December 17, 2013 at $11.33

Cardinal IPO’d in December so remains under the radar screen of many dividend funds and trades at a discount valuation of 5.4 times EV/CF. Spending 82% of their cash flow they should grow production by 9% and pay a dividend equivalent to a 5.5% yield. Look for a meaningful dividend increase and/or increase to their production growth rate after a few quarters of drilling.

Past Picks: January 9, 2013

Crescent Point Energy

Then: $37.55; Now: $39.63; Total return: +13.33%

Whitecap Resources

Then: $8.84; Now: $12.12; Total return: +45.07%

Suncor Energy

Then: $33.27; Now: $37.25; Total return: +14.41%

Total return average: +24.27%

Market outlook:

Misplaced fear of the world oil market becoming flooded has created a headwind for global oil stocks, however in 2014 Canadian oil stocks may finally have their day in the sun as they benefit from a shrinking differential to WTI, improving access to U.S. markets, and a weakening loonie. For the first time in many quarters adjusted for currency Canadian oil is now more valuable than US oil…the market so far has failed to reflect this dynamic.

Follow us on Twitter: @GlobeInvestor

 
  • SU-N
  • SU-T
  • TOG-T
  • ALX-X
  • CJ-T
  • CPG-T
  • WCP-T
Live Discussion of SU on StockTwits
More Discussion on SU-N
Live Discussion of SU on StockTwits
More Discussion on SU-T
Live Discussion of TOG on StockTwits
More Discussion on TOG-T
Live Discussion of ALX on StockTwits
More Discussion on ALX-X
Live Discussion of CJ on StockTwits
More Discussion on CJ-T
Live Discussion of CPG on StockTwits
More Discussion on CPG-T
Live Discussion of WCP on StockTwits
More Discussion on WCP-T

More Related to this Story

Topics:

In the know

Most popular video »

Highlights

More from The Globe and Mail

Most Popular Stories