Seeking Alpha

This has been an interesting year for Baytex Energy (BTE). This Canadian heavy oil specialist has been doing well with production and drilling, and the company's capital spending guidance for 2014 suggests more profitable growth on the way. At the same time, differentials have been fairly benign and could get better, while increasing use of rail offers a good hedge.

The only real issue is one of valuation. Baytex's qualities are well-known, from its above-average dividend payout (a legacy of its days as a CanRoy) to its high-quality Peace River asset. Even though the shares are down about 10% year-to-date, the shares still aren't all that cheap on an EV/EBITDA basis. Looking at a long-term NAV, though,...

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