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I sold all oil stocks in my portfolio. I didn't do it because I would be bearish on oil prices; I did it so that I could buy a large position in Whitecap Resources (
Veren-Whitecap: This Simulation Through COVID Made Me Buy A Lot
Summary
- I sold all oil stocks to buy a large position in Whitecap Resources, driven by the strong Whitecap-Veren merger and its resilience.
- Whitecap's Q1 results were solid, with production beating guidance and strong funds flow, despite Capex frontloading.
- The merger's synergies and cost reductions lower the breakeven price to $47/bbl, making the 9% dividend yield sustainable even under stress.
- Whitecap offers a 15% FCF yield at $60 WTI and can survive extreme conditions like COVID, making it a compelling investment.
Oil, Gas, Energy, Metals - That's the core of my research.I am a semi-retired former engineer who switched careers in 2018 to focus on capital management. I acquired most of my knowledge about finance and valuation from NYU Professor Damodaran and books like "Margin of Safety" and "The Intelligent Investor."I specialize in fundamental analysis and require both a deep "Margin of Safety" and a "Catalyst" to consider adding a stock to my portfolio. My portfolio usually contains no more than 10 stocks.I joined Seeking Alpha because writing helps me to organize my thoughts and allows me to share with others. Subscribe if you enjoy deep insights into the energy sector and want to better understand what you are buying.
Analyst’s Disclosure: I/we have a beneficial long position in the shares of WCP:CA either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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