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Companies RBC Added And Removed From Its Global Energy Best Ideas List

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Companies RBC Added And Removed From Its Global Energy Best Ideas List

Analysts at RBC Capital Markets added five names to its "RBC Global Energy Best Ideas List" and also removed five names.

In August, the index list lost 1.7 percent, which outperformed the 5.7 percent loss within the S&P Global Energy Sector. In addition, since February 2013, the list gained 1.6 percent, which is also superior to the 18.1 percent loss seen in the S&P index.

Five Additions To The Index

1. Canadian Natural Resource Ltd (USA) (NYSE: CNQ) is "well positioned" to benefit from a rebound in crude oil, as it is the largest heavy oil producer in Canada. The company also boasts an impressive upstream growth and emerging free cash flow generation once its Horizon oil sands expansion "bears fruit" in late 2017.

2. DNO ASA (ADR) (OTC: DTNOY)'s near-term outlook is "set to be dominated" by regular oil payments from the Kurdistan Regional Government. An allocation of $75 to $100 million of direct crude oil sales has been approved and will begin in the first half of September.

Related Link: RBC's Secular Outlook For September 2015

3. Western Gas Partners, LP (NYSE: WES) is a "defensive play" given its "solid" balance sheet and "minimal" direct commodity exposure. In addition, "significant" growth potential is possible in a recovering commodity price environment given the company's "strong" positioning in the DJ and Delaware Basins.

4. Weatherford International Plc (NYSE: WFT) is the "next man up" in the M&A front, with the largest global footprint and broadest product lines. In addition, the analysts favor U.S. land service intensive stocks and the company generates approximately 50 percent of its operating income in North America.

5. Exterran Holdings, Inc. (NYSE: EXH) is viewed favorably ahead of the proposed spin transaction, which the company "clearly supports." The company delayed the spin due to a difficult debt financing market, but the company could return to the debt markets soon, which offers a "good catalyst" for the stock.

Five Removals From The Index

1. Cameron International Corporation (NYSE: CAM) shares rose 40 percent following its acquisition. The name was removed from the index given its lower ultimate upside.

2. Macquarie Infrastructure Corp (NYSE: MIC) was removed given a view that there are "more attractive" risk-to-reward yield and growth plays in the space right now.

3. Precision Drilling Corp (USA) (NYSE: PDS)'s stock has a "lack of near-term catalysts" until commodity prices stabilize and additional clarity on 2016 E&P budgets emerges.

4. SECURE ENERGY SVCS (OTC: SECYF) has "limited visibility" beyond the third quarter, in addition to a lack of near-term catalysts until commodity prices stabilize.

5. AFRICA OIL CORP. (OTC: AOIFF) was removed following an equity issue in mid-August to deliver a FDP (field development planning) at year-end. In addition, oil price volatility could "impact enthusiasm" for a deal on the part of both buyers and sellers.

Image Credit: Public Domain

Latest Ratings for CAM

DateFirmActionFromTo
Mar 2016BarclaysMaintainsEqual-Weight
Feb 2016Deutsche BankMaintainsBuy
Feb 2016BMO CapitalMaintainsOutperform

View More Analyst Ratings for CAM
View the Latest Analyst Ratings

 

Related Articles (CAM + CNQ)

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