As far as the Canadian oil patch goes, and the energy sector broadly, I am generally of the opinion that investors are most often better served looking for opportunity elsewhere.
That being said, as with any sector, there are always pockets of value that ought to be assessed. This is particularly true for value-oriented investors with a long-term buy-and-hold investing strategy. In this article, I’m going to discuss why Crescent Point Energy (TSX:CPG)(NYSE:CPG) is on my watch list now.
Crescent Point is a stock that has seen its share price get absolutely decimated due to the double whammy of collapsing oil prices and the COVID-19 pandemic. The oil producer is indeed highly sensitive to movements in oil prices due to a relatively large amount of leverage. These factors have continued to put downward pressure on the company’s share price for quite some time.
That said, Crescent Point has done a good job of focusing on paying down debt and shoring up its balance sheet, selling producing assets to reduce the company’s overall debt load by approximately $200 million last quarter.
Crescent Point has already restructured its operations and gone into survival mode prior to COVID due to the massive drop in commodity prices we saw.
This company still has a long way to go fundamentally. However, this company is a great value pick should oil prices improve. That’s why Crescent Point is on my watch list.
Invest wisely, my friends.
