Q: Hi folks, Tamarak Valley tve/t released their 2024 Capital Budget....looks like 2 tiered & lowered guidance....stock taking a 5+% hit and nearing 52 week lows....I know liked by 5i, Nuttal, Martin Pelltier & many analysts....BUT...is this a case of TVE mgmt "over promising & under delivering", hold a fair size position.....thanks for your views/opinions....& would U rate Buy/Hold/Sell....thanks, jb
5i Research Answer:
Execution really needs to improve here. TVE has now missed five of the past eight quarters. We are OK when commodity prices drop, as the company has no control over this (unless hedging). But production guidance was weak and below estimates. While debt is OK, it is higher than most peers, and with disappointing production investors start focusing more on the balance sheet than if the reverse was true.