Recommendation: Speculative Buy
| Entry Date | Symbol | Recommendation | Entry Price (CAD) | Target 1 (CAD) | Target 2 (CAD) | Holding Duration | Potential Upside* |
|---|---|---|---|---|---|---|---|
| 5 Feb, 25 | IPO | Speculative Buy | CAD 1.7 | CAD 1.887 | CAD 2.0 | 58 days | 17.6% |
*Potential Upside (%) indicates the expected percentage increase from the Entry Price to the Target 2 Price.
Data Powered by EOD Historical Data (“EODHD”).
InPlay Oil Corp. engages in the acquisition, exploration, development, and production of petroleum and natural gas properties in Canada. The company produces and sells crude oil, natural gas, and natural gas liquids. It focuses on light oil asset base located in West Central, Alberta. InPlay Oil Corp. is headquartered in Calgary, Canada.
Higher Asset to Equity Ratio: 1.66x in Q3 2024 vs 1.58x in Q3 2023
Lower Debt to Equity Ratio: 0.20x in Q3 2024 vs 0.37x of Industry Median
Lower Operating Margin: 2.9% in Q3 2024 vs 21.1% of the Industry Median
Lower Net Margin: 0.5% in Q3 2024 vs 14.1% of the Industry Median
Declining Production, Currency Fluctuation, Subdued Economy, Inflation, etc.
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 1.7 | 1.435 | 1.887 | 2.0 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
Significant cost reductions: The Company's operational enhancements in drilling and completions since its last wells drilled in PCU7 (spring 2022) led to significant cost reductions, with the all-in cost of our latest three-well pad coming in approximately 25% lower than their forecast. The Company is confident these cost savings will be achieved in the area moving forward, and with a significant portion of its 2025 capital budget.
Positive expected numbers: For 2024, the company's current production, based on field estimates, is approximately 9,740 boe/d (58% light crude oil and NGLs). Annual production forecast remains unchanged at 8,700 – 9,000 boe/d (58% – 60% light crude oil and NGLs) . The Company’s leverage metrics are expected to remain among the lowest in peer group, with a forecasted net debt to EBITDA of 0.7x – 0.8x for 2024.
An Income Play: The Company distributed CAD 4.1 mn dividends in Q3 2024 as compared to the CAD 4.04 mn in Q3 2023. Moreover, at the last closing price of CAD 1.70 as on February 4, 2025, the stock is offering a decent dividend yield of 10.588, which looks awesome among the current economic scenarios.
Considering the healthy guidance on revenue growth for Q4 FY 2024, positive outlook, current trading levels and key business risks a ‘Speculative Buy’ recommendation has been given on the stock of IPO at the last closing price of CAD 1.70, as on February 04, 2025.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Energy Industry: Oil & Gas E&P
| Company | Change (CAD) | Price (CAD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| IPO InPlay Oil Corp |
-0.15 1.96% | 7.49 | 5.93 | 4.91 | 1.02 | 0.53 | 1.23 | 2.63 |
| CNQ Canadian Natural Resources Ltd |
-0.02 0.05% | 40.50 | 13.55 | 12.48 | 2.82 | 2.52 | 2.67 | 6.50 |
| TOU Tourmaline Oil Corp. |
-0.02 0.03% | 62.60 | 14.42 | 10.96 | 5.30 | 1.64 | 4.12 | 6.49 |
| OVV Ovintiv Inc |
0.34 0.73% | 46.78 | 5.72 | 10.39 | 1.64 | 1.06 | 1.78 | 3.44 |
| ARX ARC Resources Ltd. |
-0.14 0.52% | 26.97 | 11.94 | 9.67 | 2.92 | 1.91 | 3.07 | 5.55 |
Data Powered by EOD Historical Data (“EODHD”).
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels as on February 04, 2025. The reference data in this report has been partly sourced from REFINITIV.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
Disclaimer :
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