AGNICO EAGLE vs. DEVON ENERGY - Which is a better investment?

Summary

This video explores whether Devon Energy (ticker: DVN) is a worthy investment, highlighting the current underinvestment in oil, the arbitrage opportunity in gas prices between the US and Europe, and the upcoming Mata Horn pipeline's impact on Devon's revenue. The presenter emphasizes Devon's strong financials, insider ownership, and valuation, comparing it favorably to a gold producer, suggesting Devon is significantly undervalued. With a PE ratio of 8.74 and a price-to-cash-flow ratio of 4.44, the video concludes with a strong buy recommendation, despite acknowledging the volatility and potential political risks associated with the oil and gas sector.

Takeaways

• 📈 Devon Energy (ticker: DVN) is under consideration for investment due to its trading on various exchanges and current market conditions.
• 💰 A lack of worldwide investment in oil is leading to high oil prices, which could benefit oil and gas companies like Devon.
• 🌍 The significant price difference between natural gas in Europe and the US, along with the construction of infrastructure to transport gas, could increase Devon's profitability.
• 🚀 The upcoming commissioning of the Wink to Webster pipeline will likely increase Devon's revenue by providing a market for surplus gas production.
• 💼 Devon is investing in its business to maintain or grow production, which is a positive sign for future profitability and cost reduction.
• 🤵 Insider ownership at Devon is substantial, indicating alignment with shareholder interests and a potential commitment to the company's success.
• 💸 Devon is currently trading at a low valuation, which could make it an attractive investment opportunity.
• 📉 Devon has a low tax rate compared to other industries, which can positively impact shareholder returns.
• 🔄 The company has been reducing its share count through buybacks, increasing the ownership percentage for existing shareholders.
• 💰 Devon is returning significant capital to shareholders through dividends and share buybacks, supported by a strong free cash flow.
• 🏦 Devon operates in a safe jurisdiction (USA), which reduces geopolitical risks compared to companies operating in multiple countries.

Q & A

What is the ticker symbol for Devon Energy in the US stock market?

Devon Energy trades under the ticker symbol DVN in the US stock market.

Why is there a lack of investment in the oil industry worldwide?

The oil industry, including state-run oil companies, is underinvesting, which is likely due to various factors such as market conditions, regulatory pressures, and shifts towards renewable energy sources.

What is the current price difference between natural gas in Europe and the US?

Currently, a million BTU of natural gas in Europe is selling for about $9, while the Henry Hub spot price for natural gas in the US is about $2 per million BTU, resulting in a $7 difference.

What is the significance of the Matterhorn pipeline for Devon Energy?

The Matterhorn pipeline, which is being built to transport gas from West Texas and East New Mexico to the Houston area, is significant for Devon Energy because it will allow them to sell excess gas at a higher price, thereby increasing their revenues. Devon is also a partial owner of the pipeline.

How is the US business and industry conversion to gas expected to benefit Devon Energy?

As businesses and industries in the US convert their operations to use gas due to its low cost, this creates extra demand for gas, which benefits Devon Energy, a significant producer of gas.

What potential political catalyst is mentioned in the script that could positively impact Devon Energy's share price?

A potential political catalyst mentioned is the possibility of Republicans winning in 2024, which could lead to higher valuations for US oil and gas producers in the market.

Why is Devon Energy's insider ownership considered a positive factor for investors?

Devon Energy's heavy insider ownership, with executives and directors owning shares equivalent to 10 times their annual salary plus bonuses, aligns management's interests with shareholders, potentially leading to better decision-making for the company's future.

What is Devon Energy's dividend policy in terms of allocating free cash flow?

Devon Energy's dividend policy involves allocating 30% of their free cash flow towards strengthening the balance sheet or paying down debt, and 70% towards a fixed dividend, a variable dividend, and share buybacks.

How has Devon Energy's share count changed in the last three years?

In the last three years, Devon Energy has retired about 6% of their outstanding shares, increasing the ownership stake of existing shareholders without the need to purchase additional shares.

How does Devon Energy's tax situation compare to that of a Canadian gold producer?

Devon Energy's average income tax rate is about 20%, which is lower compared to the 30% to 40% average income tax rate for a Canadian gold producer. Additionally, US investors in Devon Energy may benefit from tax advantages on dividends compared to those investing in Canadian companies.

What is the comparison between Devon Energy and Agnico Eagle Mines in terms of market cap and enterprise value?

Both Devon Energy and Agnico Eagle Mines have similar market caps of $29 billion and $32.6 billion respectively, and enterprise values of $34.5 billion and $34 billion respectively, indicating that investors are paying a comparable price for shares in both companies.

Why is Devon Energy considered to be a better investment compared to Agnico Eagle Mines based on the financial numbers presented?

Devon Energy has significantly higher revenues, gross profit, operating income, and net income compared to Agnico Eagle Mines, despite both companies having similar market caps and enterprise values. Devon also has a lower tax rate and has been growing its retained earnings, which can be reinvested into the business.

What is the current price-to-earnings ratio for Devon Energy, and how might it change with expected cost reductions in 2024?

The current price-to-earnings ratio for Devon Energy is 8.74. With expected cost reductions of about 10% in 2024, earnings are likely to increase, which could lower the price-to-earnings ratio if the stock price remains the same.

What is the risk level assigned to Devon Energy, and what factors contribute to this assessment?

The risk level assigned to Devon Energy is a four out of ten, considering factors such as the current good valuation, potential volatility in oil and gas stocks, and possible future political or tax-related risks.

What is the final verdict on Devon Energy as an investment according to the script?

The final verdict on Devon Energy as an investment is a 'strong buy', based on the company's incredible valuations, potential for good returns over a few years, and the positive factors discussed in the script.

Outlines

00:00

📈 Investing in Devon Energy: A Potential Buy?

The script opens with an introduction to Devon Energy, a company traded under the ticker DVN, and emphasizes the need for personal research before investing. It discusses the current investment climate for oil and gas, citing reasons such as underinvestment in the industry, price arbitrage between the US and Europe, and the construction of the Matterhorn pipeline. The script also mentions the potential impact of political changes on oil and gas valuations. Devon Energy is highlighted for its investment in future growth, cost reduction forecasts, and insider ownership aligning management and shareholder interests.

05:01

💼 Devon Energy's Financial Strengths and Tax Advantages

This paragraph delves into Devon Energy's financial position, comparing it favorably to a Canadian gold producer in terms of tax rates and dividend taxation for American investors. It underscores Devon's share repurchase activities, which have reduced the share count and increased shareholder ownership. The company's dividend policy is explained, which allocates a portion of free cash flow to a fixed dividend, variable dividends, and share buybacks. The script also contrasts Devon's operations in the US with those of a gold company operating in Canada, highlighting Devon's safe jurisdiction and valuation metrics compared to the gold company.

10:03

📊 Financial Comparison: Devon vs. Agnico Eagle

The script provides a detailed financial comparison between Devon Energy and Agnico Eagle Mines, demonstrating Devon's superior revenue, gross profit, operating income, and net income despite similar market capitalization and enterprise value. It discusses tax rates, showing Devon's lower tax burden over the past four years, and examines cash flows, free cash flows, and the amount returned to shareholders through dividends and share buybacks. The comparison also touches on debt levels, interest coverage ratios, and debt maturities, presenting Devon's financial health and growth potential.

15:03

🏆 Devon's Retained Earnings Growth and Return on Capital

This paragraph focuses on Devon's retained earnings growth and return on capital, showing a positive trend for Devon compared to Agnico Eagle's negative retained earnings in recent years. It argues that Devon's higher retained earnings enable further business growth through reinvestment. The return on capital for Devon is significantly higher than Agnico Eagle's, indicating a more efficient use of capital. The script concludes by reiterating Devon's strong valuation and the presenter's 'strong buy' recommendation, while also discussing the potential risks associated with investing in oil and gas stocks.

Keywords

💡Devon Energy

Devon Energy is the primary subject of the video, an oil and gas company that trades under the ticker symbol DVN in the US. The video discusses whether it's a good investment, highlighting its cash flows, valuation, and various strategic advantages. The script mentions Devon's reinvestment in its business, insider ownership, and tax situation as factors contributing to its potential as a strong buy.

💡Cash Flows

Cash flows are the inflows and outflows of cash within a company, which are crucial for evaluating a company's financial health and its ability to generate profits. In the context of the video, Devon's cash flows are discussed as a positive indicator of the company's financial stability and its capacity to maintain or grow production.

💡Valuation

Valuation refers to the process of determining the economic value of an asset or a company. The video emphasizes Devon's valuation as being 'blow you away' impressive, suggesting that the company is undervalued in the market, which could be a compelling reason for investment.

💡Gas Price Arbitrage

Gas price arbitrage is the practice of buying natural gas in one market at a lower price and selling it in another market at a higher price to profit from the price difference. The script points out the $7 difference between the US and Europe as a significant opportunity for Devon, which could benefit from increased exports to Europe.

💡Waha Pipeline

The Waha Pipeline is a major piece of infrastructure that Devon is involved with, which will transport natural gas from West Texas and East New Mexico to the Houston area. The video explains that this pipeline will help Devon sell excess gas at a higher price, thus increasing its revenues.

💡Insider Ownership

Insider ownership refers to the percentage of a company's shares that are owned by executives and directors. The video highlights that Devon has heavy insider ownership, which is seen as a positive sign because it indicates that management's interests are aligned with those of the shareholders.

💡Tax Rates

Tax rates are the percentages at which companies are taxed on their income. The script discusses Devon's relatively low tax rates compared to other companies, such as Canadian gold producers, as a financial advantage that contributes to the company's valuation and attractiveness as an investment.

💡Share Repurchase

A share repurchase is when a company buys back its own shares from the market, which can increase the value of remaining shares and is a way of returning capital to shareholders. The video mentions that Devon has retired about 6% of its outstanding shares in the last three years, indicating a commitment to enhancing shareholder value.

💡Dividend

A dividend is a payment made by a corporation to its shareholders, usually as a distribution of profits. The video describes Devon's dividend policy, which includes a fixed and variable dividend, as a way of returning a significant portion of its free cash flow to shareholders.

💡Market Cap

Market capitalization, or market cap, is the total market value of a company's outstanding shares of stock. The script uses market cap to compare Devon with Agnico Eagle, another company in the natural resource sector, to illustrate Devon's relative value and attractiveness as an investment.

💡Enterprise Value

Enterprise value is a measure of a company's total value, often used as a more comprehensive alternative to equity market capitalization. It includes a company's market capitalization, debt, cash, and other investments. The video compares Devon's enterprise value with Agnico Eagle's to further discuss valuation and investment potential.

💡Retained Earnings

Retained earnings are the cumulative amount of a company's net income that has been kept or 'retained' by the company rather than paid out to shareholders as dividends. The script points out that Devon has been growing its retained earnings, which can be reinvested in the business for growth and expansion.

💡Return on Capital

Return on capital, or ROC, is a measure of how effectively a company generates profits from its capital investments. The video notes that Devon has a higher ROC than Agnico Eagle, indicating that Devon is more efficient in using its capital to generate profits.

Highlights

Devon Energy is analyzed for investment potential, trading under the ticker DVN in the US.

Global underinvestment in oil is leading to high prices, creating an opportunity for oil and gas companies.

Gas price arbitrage between the US and Europe is highlighted, with infrastructure being built to bridge the gap.

The Matterhorn pipeline's impact on Devon's revenue is discussed, as it will alleviate gas production surplus in West Texas and New Mexico.

Devon's business strategy includes investing to maintain or grow production, unlike some companies that cannibalize their business by not reinvesting.

Devon forecasts a 10% reduction in costs for 2024, potentially increasing income and dividends.

Insider ownership at Devon is significant, aligning management decisions with shareholder interests.

Devon is considered undervalued, offering a compelling investment opportunity.

Devon benefits from low tax rates and favorable tax treatment for US investors compared to Canadian gold producers.

Devon has been retiring shares, increasing the ownership percentage for existing shareholders.

Devon returns significant capital to shareholders through share buybacks and dividends.

Devon operates entirely in the USA, providing a safe jurisdiction for production.

A comparison with Agnico Eagle Mines shows Devon's superior financial performance and valuation.

Devon's retained earnings are growing, allowing for reinvestment and business growth.

Devon's return on capital is significantly higher than Agnico Eagle's, indicating better capital efficiency.

Devon's debt is substantial but manageable due to strong cash flow and long debt maturities.

The investment verdict for Devon Energy is a 'strong buy' based on current valuations and future potential.

Transcripts

today we're going to dig into Devon

energy to find out whether it's a buy or

not it trades on many exchanges around

the world but in the US it trades under

the ticker

dvn as always don't take this as

investment advice and always do lots of

your own research before investing any

of your money in a little bit we're

going to talk about Devon's cash flows

and Devon's valuation and I think that's

going to blow you away but first let's

talk about why invest in oil and gas

right now first up is lack of investment

worldwide in oil the industry including

the state-run oil companies are

underinvestigated

ly to remain high next you have the gas

price Arbitrage right now a million btu

of natural gas in Europe is selling for

about $9 in the US the Henry hub spot

price for natural gas is about $2 per

million btu so you have a $7 difference

between the US and Europe and you know

what the infrastructure to get the gas

from the US to Europe is being built

right now and as we start selling more

natural gas in Europe the price of gas

in Europe will go down and the price of

gas in the US will go up which will

benefit a US producer like Devon and

next in the oil and gas space you have

incredible valuations at least in the US

and Canada and we're going to get to the

valuation of Devon here in a little bit

and then you have the matter horn

pipeline that's being built and it's

going to be commissioned in quarter 3 of

2024 so very very soon and this is a

pipeline that goes from like East New

Mexico or west Texas to the greater

Houston area or the Katy Texas area and

the reason this is important is because

Devon is a big producer in the west

Texas and East New Mexico area and there

is too much gas being produced there so

much in fact that they have to burn a

lot of the gas that's being produced

because they have nowhere to send it

however after this matter horn pipeline

is built they'll be able to send a lot

of it to Houston and they'll get a much

higher price for that because actually

West Texas natural gas is selling for a

lower price right now than the Henry hub

spot price so that matter horn pipeline

should bring revenues up for Devon and

as a matter of fact Devon is a partial

owner of the matter horn Pipeline and

the next reason to invest in a company

like Devon or in the oil and gas space

is that businesses and Industry in the

US is converting to gas so this is

especially going to help a company like

Devon who has a lot of exposure to gas

right now they're making most of their

Mone money from oil because the gas

prices are so low however you have all

this industry and all these businesses

that are converting their operations to

gas because gas is so cheap right now so

this is creating a lot of extra demand

that's happening right now and next we

have a potential political Catalyst and

that is if the Republicans win in

2024 I think oil and gas producers in

the US will be valued higher in the

market so that could have a positive

impact on the share price this year and

now why we might want to invest in Devon

energy first of all they're investing

enough to maintain or grow production a

lot of these oil and gas companies

aren't reinvesting enough in their

business and they're actually

cannibalizing their business you'll see

some oil and gas companies especially

the state-owned companies paying crazy

high dividends but they're only able to

do that because they're not reinvesting

in their own business and reinvesting

for the future and because of this lack

of investment you want a company that's

investing for the future so you can take

advantage of those future high prices

and Devon is forecasting that they're

going to be able to reduce costs by 10%

in 2024 and when you can maintain

production while at the same time

decreasing your cost by 10% that adds a

lot of extra income to your bottom line

and when you have a higher number on

your bottom line that means more

dividends and more share BuyBacks the

next reason is Devon has heavy Insider

ownership between the executives and the

directors almost all of them own like 10

times their annual salary plus bonuses

in shares and 10 times their annual

salary well that's pretty rare to see

but that's a very good thing because

that means that when management makes

decisions you know that it's going to be

in the best interest of the shareholder

whereas a lot of times when the top

management doesn't own much stock

they're making decisions that are in

their best interest not in the

shareholders best interest the next

reason we might want to buy Devon today

is because it's super cheap and we're

going to get into the valuation here in

a little bit and also you have low tax

rates Devon's average income tax each

year is about 20% whereas for example if

you invest in a Canadian gold producer

that average income tax rate is going to

be 30% or 40% and in addition to this at

least for me as an American I have an

advantage because when Devon pays out a

dividend I'm not necessar L taxed on

that if I hold that in a tax deferred or

a tax-free account I'm not taxed on that

dividend and also for lower earners in

the US if between you and your spouse

you make less than $889,000 in a year

total you're not taxed on any dividends

at all but let's say you own a Canadian

gold company and that company pays a

dividend as an American you're

automatically taxed 15% the moment that

dividend is paid even if you hold it in

a tax-free account and even if between

you and your spouse you have a low

income you're still tax that 15% and you

can't avoid it so that's something to

consider as well if you're considering

buying a Canadian gold company versus a

US oil and gas company well you're going

to have a better tax situation for the

US oil and gas company at least if

you're an American like me but I know a

lot of you watching are from all around

the world and I don't know your personal

tax situation the next reason to buy

Devon is we have a decreasing share

count in approximately the last three

years Devon has retired about 6% of

their outstanding shares so every year

that you're a shareholder of Devon

without buying any more shares at all

you become a bigger owner of the company

each year as more and more share

repurchases happen and also on that note

Devon is returning a lot of money to

shareholders and they're doing that in

two ways number one they're buying back

shares and number two they're paying a

nice dividend now they have this

dividend policy where they have a fixed

dividend and a variable dividend they

take their free cash flow and they take

30% of their free cash flow and that

goes towards strengthening the balance

sheet or paying down debt and then they

take 70% of the free cash flow and that

goes to the fixed dividend the variable

dividend and share BuyBacks so from that

70% of free cash flow they pay the fixed

dividend first so you can look forward

to getting at least 22 cents per share

per quarter because that's that's a

fixed dividend and then depending on

whether they think their company is

undervalued or not they pay a variable

dividend or they buy back shares or a

combination of the two so some years

this dividend is going to be huge and

then other years we're going to see the

share count drop a lot because the

company is generating a ton of cash so

they have a lot of money to return to

shareholders and another reason you

might be interested in purchasing Devon

shares is they operate in a safe

jurisdiction 100% of their production

comes from the USA on this channel I

talk a lot about gold and precious

metals so I want to compare Devon to a

similar company in the gold space Devon

operates exclusively in the US so they

operate in a safe jurisdiction whereas

agnico Eagle mines operates mostly in

Canada so ago Eagle is in safe

jurisdictions as well and then in terms

of the company valuation the market cap

29 billion for Devon 32.6 billion for

ago Eagle Enterprise Value 3 4.5 billion

for Devon 34 billion for agnico Eagle

One thing I see beginner investors

getting confused about is thinking that

because one company's share price is

lower well then that company is cheaper

but that's not the case because it

depends how many shares you have

outstanding so Devon you're paying a

little over $47 a share and ano Eagle a

little over $65 a share but in terms of

market cap or Enterprise Value they're

almost exactly the same considering

you're paying the same price whether you

buy Devon or ago Eagle let's look at

some Financial numbers from the

companies to see what you're getting for

that money and by the way even though

I'm going to be picking on agnico Eagle

here it's not because I think it's a bad

company in fact I think it's a very good

company I think it's a very good gold

producer but I want to give you this

comparison because that is a super

popular company to own in the gold space

it's one of the most recommended

companies you'll hear it's one that's in

every one of the funds every one of the

mutual funds every one of the ETFs it's

all over the place because it's a very

good company but I want to make this

comparison to show you just how cheap

Devon is first up is revenues in the

blue column here we have Devon in the

black column we have ago Eagle in terms

of revenues in the last 12 months Devon

has earned 2.1 times the amount of

Revenue that AO eagle has earned but

that doesn't take into account how much

it cost each company to get the

resources out of the ground so next

gross profit so this is revenues minus

what it cost to get it out of the ground

and Devon has about double the gross

profit of agnico eagle and next up we

have operating income so this is gross

profit minus basically what it costs to

run the business and in this case Devon

is almost three times that of anniko

eagle and keep in mind you're paying

almost the exact same price to buy

shares of Devon as you are to buy shares

of agnico Eagle but you're getting three

times the operating income buying Devon

and then it's also worth looking at the

tax so these are the tax rates for Devon

andiko Eagle going back four years so

for Devon we have 18% 2% 22% 18% for

igno Eagle we have 33% 40% 40% 18% so

igno Eagle is usually in the 30 to 40%

range and Devon usually hovers right

around 20% and the taxes are taken from

the operating income so the taxes affect

your bottom line a lot and now we have

the net income in the past 12 months for

each company agnico Eagle is way down

here at 472 million and Devon is way up

here at almost 3.4 billion in terms of

after tax income Devon shareholders

earned 7.2 times that of a niku eagle

shareholders now it's worth mentioning

that in the past year the oil price has

only gone up a little bit whereas the

gold price has gone up 15 or 20% so

maybe a year from now maybe it's not 7.2

times maybe it's six times or maybe it's

five times but even if anniko Eagle

grows her revenues by 20% grows her

operating income by 20% well Devon's

after tax earnings should far exceed

that of ago Eagle despite a higher gold

price and now we still have the same two

companies but we're looking at cash

flows so this is cash from operations

Devon anniko Eagle Devon has 2. four

times the amount of cash from operations

remember you're paying the same price

for each company and next we have free

cash flow that's what we just saw cash

from operations minus capex so capex is

going to be what it cost to maintain

production and what it cost to grow

production and Devon earned 2.6 times

the amount of free cash flow as igno

eagle and this is how much money is

being returned to shareholders now these

bars are negative because it's a cash

outflow because it's going back to

shareholders so here in this column we

have Devon's share repurchases of about

720 million here we have Devon's

dividends paid of over 1.5 billion here

we have ago Eagle share repurchases of

about 50 million and here we have ago

Eagles dividends of 640 million and

remember this is the same size of

company and Devon returned 2.3 billion

to shareholders while anniko Eagle

returned $700 million to shareholders

this is one thing where anniko eagle has

Devon beid and that is the total amount

of debt so Devon has about $5.7 billion

of long-term debt whereas ago eagle has

1.7 billion so Devon has 3.3 times the

amount of debt however when you compare

the amount of debt to the amount of cash

flow each company is making well it's

actually not so bad Devon's debt doesn't

look that bad and here we're going to

see that so this is the cash from

operation

divided by the interest expense for each

company so on this chart the higher the

number the better so here we have the

most recent year and Devon had about 18

times interest coverage ratio whereas

Aiko Eagle had 26 times so even though

Devon's debt is way

higher their interest coverage ratio is

not that much lower because they're

generating a lot of cash and I thought

this was interesting to look at this is

Devon's debt maturities so they have

$5.7 billion in debt however almost

three billion of that doesn't mature

until after 2040 so they have very long

Daya maturities and they don't have to

pay back a lot of this debt for a long

period of time and their average

interest rate is only a bit over 5% so

their average interest rate is pretty

darn low which is why their interest

coverage ratio is so high even though

they do have quite a bit of debt so to

me their debt really isn't a concern and

this is interesting to me this is

retained earnings so this is taking your

earnings subtracting how much you return

to shareholders in the form of BuyBacks

and dividends and this is what's left

this is the year 2020 2021 22 and 23

well in these three years ago Eagle was

negative but you can see that Devon is

growing their retained earnings every

single year and this doesn't mean that

they had 6.2 billion dollar in the most

recent year because it takes this year

and it adds about another two billion in

retained earnings going from 4.3 billion

to 6.2 billion now igno eagle has been

negative for 3 years and then finally in

2023 they jumped up into the positive

but because Devon has more retained

earnings that means they can reinvest

more money into their business to

continue growing their business and this

is another way to look at which 1 is a

better company and these are each of the

companies return on Capital so this is

2021 22 and 23 in the most recent year

Devon had a return on capital of 24%

whereas igno Eagle was about

55% Devon's return on Capital was 4.4

times better than ago Eagles and despite

all these facts here remember ago Eagle

is not a bad company anniko Eagle mines

is a very good company it's just that

Devon is that much better

and Devon is that much cheaper I'll get

to my conclusions for this investment in

just a moment but I want to let you know

that in the past few days I'm seeing

some of the best valuations in the

natural resource sector that I've seen

in a very long time but you got to make

sure you're investing in the right

stocks and you got to make sure that

you're following those very very closely

so in my newsletter I share with you

what I'm putting my own money in and I

tell you what I'm doing before I buy or

sell anything so if you're interested in

that go to Mining stock monkey.com

produv and that'll take you right there

or you can click on this link right up

here the price is going up on July 1st

but anyone who signs up before then and

stays subscribed gets that price forever

so now let's talk about my conclusion

for this investment the price to

earnings ratio right now is at

8.74 however costs are coming down by

about 10% in 2024 so I expect earnings

to increase which will bring down the

price to earnings ratio if the stock

price were to stay the same but as

earnings increase usually the stock

price goes up as well and then you have

a price to cash flow of just

4.44 price to cash flows like this are

typically reserved for declining

Industries however I don't think this is

a declining company because they're

reinvesting enough to maintain or grow

production yes the politicians are

saying we're going to put you oil

companies out of business in 2030

and by 2030 everybody's going to be

driving electric cars and internal

combustion engines won't exist but I

don't believe that I don't believe the

politicians and I believe that at some

point in the future that perception is

going to change once people realize how

wrong these politicians are and now we

have the risk level so one being the

least risky 10 being the most risky a

big part of the risk level is buying at

a good price like if you buy a great

company but you pay a really high price

well your risk level could be a 10

because if you're buying in a bubble

well that's very very risky however here

you're buying when the valuations are

actually quite good I am adding a

certain level of risk for this because

these oil and gas stocks do tend to be

pretty volatile and they could also be

the victim of higher taxes like in the

form of a windfall profit tax or

something like that in the future if oil

prices were to go way up so for those

Reasons I'm putting the risk level at a

four so overall this is a pretty safe

investment in my book but keep in mind

these oil and gas stocks are very

volatile so this stock price could

easily go down by 30% over the next year

or so and today the stock price is

sitting somewhere around $47 a share and

my verdict between sell hold buy or

strong buy I'm giving this a strong buy

I think these are incredible valuations

today and if if you buy today and hold

for a few years I think you're going to

see very very good returns if you're

interested in my newsletter click on

this link right here and sign up before

the price goes up on July 1st and next

watch this video it's my analysis of B2

gold and I'll see you over there