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Crescent Energy Company Class A (CRGY $8.53)
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Vital Energy Inc. par value $0.01 per share (VTLE $16.07)
Q: Hi there. I'm wanting your opinion on this stock and whether it could be put into a portfolio at current price? Seems the sector may still be undervalued.
5i Research Answer:
Its small size adds risk, and stock momentum is highly negative. Some growth is expected, and the valuation is very attractive, but there is some leverage risk here, with debt at $3.3B or 2X cash flow. It is buying VTLE right now, which is going to add another $2B+ in debt. While it is OK, we would consider risks too high on it right now for serious consideration.