Eric Nuttall's Top Picks: March 4, 2022
BNN Bloomberg
Top picks from Eric Nuttall, partner and senior portfolio manager, Ninepoint Partners
Eric Nuttall, partner and senior portfolio manager, Ninepoint Partners
FOCUS: Energy stocks
MARKET OUTLOOK:
Oil is in a structural, multi-year bull market that will result in all-time high oil prices. Energy stocks, due to still lingering energy ignorance, are currently discounting US$60 WTI.
We believe we have entered a “golden era” of free cash flow, which will translate into egregious dividends and share buybacks. The average energy stock could privatize and become debt free with just 3.3 years of free cash flow at US$100 WTI yet on average has 15 years of stay flat inventory.
Energy stocks represent a generational opportunity (still) and with a demand surge later this year once travel related demand recovers, the imminent exhaustion of OPEC spare capacity, and now a “security of supply” premium to account for the risk to Russia’s 4.5M barrels per day of oil exports, we see the price of oil advancing to US$130-US$150 per barrel in the coming months, despite a likely Iranian nuclear deal.
