Calgarypuck Forums - The Unofficial Calgary Flames Fan Community - View Single Post - The ongoing financial turmoil and financial discussion thread

Wookie · 11-27-2008, 02:54 PM

I think a good example of the spring loaded comments by slava or MG would be CNQ. Hit a low last week of $34.19. This was shortly after I received an email from tristone capital saying

Stock is getting pummeled today. The stock looks cheap relative to sensitivities at low oil prices:
It appears as thought the market is not adequately factoring in the company's '09 hedging program. They have 30-40% of production hedged at ~US$81/b.
When we run the NAV on a long-term flat price of US$50/b and US$5/mmbtu NYMEX, our NAV is $39/sh. Thus, the stock is trading at a long-term implied price of US$50/b.
Regarding Horizon, I ran a sensitivity assuming this project produces zero in 2009 at a US$50/b price. Free cash flow is still high at $2 billion, largely reflecting the benefit of the hedges. This is on their already announced CAPEX program of $4 billion in '09; there appears to be little risk to this spending.
The stock looks well protected down here, and arguably they still have some financial room left to make acquisitions in the $1-2 billion range. I would highlight this as one of the lower risk large caps to be picking away at.

Today it's closed @ $50.54.

That's a quick 48%.

I wanted to buy some before it fell to $34 when it was at $41 (that's when I got the email), but I was sad/nervous about realizing a loss in some other crappy company I own. Now, I'm kicking myself.

If things don't get any worse for the O&G sector there's a 48% recovery that was missed out on in 4 days.

11-27-2008, 02:54 PM	#655
Wookie Chick Magnet Join Date: Oct 2001 Exp:	I think a good example of the spring loaded comments by slava or MG would be CNQ. Hit a low last week of $34.19. This was shortly after I received an email from tristone capital saying Stock is getting pummeled today. The stock looks cheap relative to sensitivities at low oil prices: It appears as thought the market is not adequately factoring in the company's '09 hedging program. They have 30-40% of production hedged at ~US$81/b. When we run the NAV on a long-term flat price of US$50/b and US$5/mmbtu NYMEX, our NAV is $39/sh. Thus, the stock is trading at a long-term implied price of US$50/b. Regarding Horizon, I ran a sensitivity assuming this project produces zero in 2009 at a US$50/b price. Free cash flow is still high at $2 billion, largely reflecting the benefit of the hedges. This is on their already announced CAPEX program of $4 billion in '09; there appears to be little risk to this spending. The stock looks well protected down here, and arguably they still have some financial room left to make acquisitions in the $1-2 billion range. I would highlight this as one of the lower risk large caps to be picking away at. Today it's closed @ $50.54. That's a quick 48%. I wanted to buy some before it fell to $34 when it was at $41 (that's when I got the email), but I was sad/nervous about realizing a loss in some other crappy company I own. Now, I'm kicking myself. If things don't get any worse for the O&G sector there's a 48% recovery that was missed out on in 4 days.