Q: I have owned CJ since July 2022, its SP has been very much flat during that period. I do have a bit of cash sitting on the sideline and I wonder if I should top up a bit more on CJ, or just cash out and move onto another name.
Patience may be virtue in investing but there are other more lucrative returns out there. What's your take on CJ in the next 12 months or so? Thanks.
Patience may be virtue in investing but there are other more lucrative returns out there. What's your take on CJ in the next 12 months or so? Thanks.
5i Research Answer:
CJ has performed similarly to most oil and gas producers over the past year, where a lot of the gains were made in the run-up until mid-2022, and have since flatlined or declined slightly alongside the price of oil. CJ pays a strong yield of ~10%, has low debt levels and a strong asset base, and is at a cheap valuation. Over the next year, we feel that a lot of the oil and gas stocks can trade sideways as their balance sheets remain strong, yields remain high, and the price of oil trades sideways. If the price of oil jumps in the next 12 months, we could envision oil producers increasing in share price. While we think CJ is mostly fundamentally strong, within the oil and gas space, we would prefer PHX or BIR over CJ.