Look for Birchcliff shares to build on their recent jump

Article Excerpt

Energy stocks are moving up lately, and Birchcliff shares have almost doubled in the last two months. Given the company’s steady output and cash flow, and its manageable debt, we think the stock can go higher. BIRCHCLIFF ENERGY, $3.25, is a buy. The company (Toronto symbol BIR; TSINetwork Rating: Speculative) (www.birchcliffenergy.com; Shares outstanding: 265.9 million; Market cap: $896.2 million; Dividend yield: 0.6%) explores for and produces oil and gas. Its average output of 78.376 barrels of oil equivalent per day is 76% natural gas and 24% oil. While cash flow per share in the quarter ended September 30, 2020, fell 8.3%, to $0.22 from $0.24 a year earlier, it nonetheless remained positive. The drop reflects lower oil prices, as well as 2.7% lower production. The company’s long-term debt stands at $771.7 million, or a high but manageable 86% of its market cap. As well, it has no debt coming due until May 11, 2022. Your shares trade at just 2.6 times Birchcliff’s forecast 2021 cash flow per share…