Recommendation: Speculative Buy
| Entry Date | Symbol | Recommendation | Entry Price (CAD) | Target 1 (CAD) | Target 2 (CAD) | Holding Duration | Potential Upside* |
|---|---|---|---|---|---|---|---|
| 31 Dec, 24 | SDE | Speculative Buy | CAD 3.33 | CAD 3.7 | CAD 3.9 | 2 days | 17.1% |
*Potential Upside (%) indicates the expected percentage increase from the Entry Price to the Target 2 Price.
Data Powered by EOD Historical Data (“EODHD”).
Spartan Delta Corp. engages in the exploration, development, and production of oil and natural gas reserves in the Western Canada. Its assets are located in Montney and Deep Basin. The company was formerly known as Return Energy Inc. and changed its name to Spartan Delta Corp. in May 2020. The company was incorporated in 2006 and is headquartered in Calgary, Canada.
Strong Shareholders' Equity: Shareholders' equity increased to $464.4 million as of September 30, 2024, from $429.7 million at the end of 2023
Revenue Growth from Acquisitions: Spartan Delta completed the Willesden Green North Acquisition in May 2024, contributing $9.5 million in revenue and $7.6 million in operating income from May to September 2024
Declining Oil and Gas Revenue: Oil and gas sales for the nine months ended September 30, 2024, were $218.2 million, a significant drop compared to $566.9 million in the same period in 2023
Increased Debt Levels: Long-term debt rose to $104.1 million as of September 30, 2024, from $44.5 million at the end of 2023, reflecting greater financial leverage
Integration and Execution Risks from Acquisitions, Production Depletion and Reserve Replacement, High Capital Expenditure Requirements, Climate Change Risks, Limited Diversification, Regulatory Risks, etc.
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 3.33 | 2.93 | 3.7 | 3.9 |
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.
On the daily chart, SDE prices are currently holding above the key falling trendline support zone, suggesting a potential for price stabilization or a possible rebound. The Relative Strength Index (RSI) at the 14-period is sitting at approximately 53.70, reflecting neutral to slightly bullish momentum. The price action is also supported by the 21-period Simple Moving Average (SMA), which is currently acting as a dynamic support level, further reinforcing the potential for continued price consolidation or upward movement.
As per the above-mentioned technical indicators analysis, a ‘Speculative Buy’ rating has been given to Spartan Delta Corp (TSX: SDE) at the closing market price of CAD 3.33 as of December 30, 2024.
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) |
|---|---|---|---|---|---|---|---|---|
| SDE Spartan Delta Corp |
0.06 1.80% | 3.40 | 4.95 | 12.59 | 2.55 | 1.48 | 2.64 | 4.33 |
| CNQ Canadian Natural Resources Ltd |
0.26 0.58% | 44.53 | 13.55 | 12.48 | 2.82 | 2.52 | 2.67 | 6.50 |
| TOU Tourmaline Oil Corp. |
0.60 0.86% | 70.00 | 14.42 | 10.96 | 5.30 | 1.64 | 4.12 | 6.49 |
| OVV Ovintiv Inc |
1.40 2.27% | 62.99 | 5.72 | 10.39 | 1.64 | 1.06 | 1.78 | 3.44 |
| ARX ARC Resources Ltd. |
0.07 0.24% | 29.00 | 11.94 | 9.67 | 2.92 | 1.91 | 3.07 | 5.55 |
Data Powered by EOD Historical Data (“EODHD”).
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
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 is December 30, 2024. 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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