Bill Harris is a partner and portfolio manager at Avenue Investment Management. His focus is on resource stocks.
The shares trade at close to net asset value and production will grow 50 per cent over the next 3 years. The company is doing a good job of controlling costs.
Canadian Natural Resources
The stock is now trading at a compelling valuation based on 4.5 times next year’s cash flow. Western Canadian pipeline constrains should be fixable over the next two years.
The stock yields 5 per cent and we expect the company can grow organically at 5 per cent per year. This is a very stable business if you look at it over several quarters.
June 9, 2011
Total return: -20.38%
Total return: -31.52%
Total return: +20.88%
Total Return Average: -10.34%
Low interest rates continue to distort investor behavior. Avenue’s strategy continues to be finding and investing in companies with stable earnings and predictable growth.
Compiled by Franklin Cameron/BNN Market Call Tonight
See the full BNN interview here
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Companies & investments Mentioned In This Article (6)
YRI -T 10.71 -0.58
-5.137% 3.013M Canadian Natural Resources
CNQ-T 30.39 0.67
2.254% 2.714M Keyera Corp.
KEY-T 63.03 0.94
1.514% 244,373 Longview Oil
LNV-T 4.99 0.09
1.837% 24,680 HudBay Minerals
HBM-T 7.89 -0.07
-0.879% 339,111 Yamana Gold Inc.
YRI-T 10.71 -0.58