Canadian Natural Resources: Almost All The Signs Point To A Buy (Archive)

This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.

Elevator Pitch

• There's been disappointments in margins delivery for Canadian Natural Resources, partly driven by higher conversion costs. This has led to downgraded earnings expectations by Wall St analysts.
• Synthetic crude prices are stable and natural gas prices have positive tailwinds. CNQ is set to benefit from this via increased production at more favorable economics.
• Total equivalent production of crude oil and natural gas is currently steady. Gross profit unit economics are improving. I anticipate further upside in both these variables.
• Valuations indicate fair value to slightly expensive as CNQ stock trades near its longer term 1-yr fwd EV/EBITDA and at a modest 11.5% premium vs peers.
• Relative technicals are bullish, posting a bull flag on the monthly chart. But there's no ideal buy trigger yet in the form of a false breakout to the downside.

Read the full article here.