Eric Nuttall Warns of "The Worst Energy Crisis of Our Lifetimes": Here Are His Top 3 Stock Picks
As physical oil supply tightens and global inventory buffers drain, Ninepoint Partners’ Eric Nuttall identifies three significantly mispriced Canadian energy producers positioned for substantial upside.
While broader financial markets choose temporary complacency over physical reality, Ninepoint Partners senior portfolio manager Eric Nuttall sees a stark structural deficit silently tightening its grip on global oil markets.
Global buffer zones are draining at a record pace, Strategic Petroleum Reserves are scraping operational minimums, and ongoing transit friction near the Strait of Hormuz continues to restrict roughly seven million barrels per day of Middle Eastern production. For investors paying attention to physical supply chains rather than daily headline noise, the fundamental floor price for crude oil has shifted higher by at least US$10 per barrel compared to pre-war baselines. That structural baseline creates a fertile environment for well-positioned producers trading at undeniable bargain valuations.
Leading the charge for large-cap value is Cenovus Energy Inc. (TSX: CVE), which remains the cheapest major Canadian energy stock relative to its cash flow generation. The company has enjoyed a massive windfall from widening global refining margins, with refining cash flows jumping two-fold in Canada and three-fold in the United States year-over-year. As ongoing debt reduction targets are met, management is on track to scale shareholder returns from 75 percent to 100 percent of free cash flow by year-end through direct share buybacks. Trading at a modest 5.8 times 2027 enterprise value to cash flow against a target valuation of eight times, Cenovus Energy Inc. (TSX: CVE) offers a clear runway for 40 to 50 percent potential upside over the next twelve to twenty-four months.
For investors seeking a balance of yield and aggressive production growth, Strathcona Resources Ltd. (TSX: SCR) presents a uniquely attractive setup. Armed with multi-decade drilling inventory, the producer plans to expand total production by 64 percent over the next five years while generating between $400 million and $800 million in incremental annual free cash flow at conservative US$70 to US$80 West Texas Intermediate crude prices. At US$70 WTI, Strathcona Resources Ltd. (TSX: SCR) currently trades at 5.8 times 2027 enterprise value to cash flow, a multiple that naturally compresses to an ultra-cheap 3.8 times by 2030 as output scales up, far below Nuttall's fair value target of seven times.
Rounding out the high-conviction trio is Ovintiv Inc. (TSX: OVV), a company boasting a rare competitive moat in reserve longevity. With more than ten years of high-quality drilling locations in the Permian Basin and upwards of twenty years in the Montney, the producer holds an inventory horizon that vastly outpaces many North American competitors. As continuous balance sheet deleveraging meets strong well productivity, Ovintiv Inc. (TSX: OVV) stands out as a prime candidate either for a significant market multiple re-rate or a takeover target for inventory-starved industry peers.
As refining crack spreads hold near record highs and refined fuel tightness inevitably spills into crude pricing, the valuation discount applied to high-quality energy stocks appears increasingly out of touch. Disciplined producers generating heavy free cash flow, returning capital directly to investors, and sitting on deep asset bases offer a compelling risk-reward proposition for patient capital.
Sources
- BNN Bloomberg Market Call, "Eric Nuttall’s Top Picks for Aug. 10, 2026" (Published August 10, 2026).
- Ninepoint Partners Portfolio Disclosures and Energy Market Outlook.
- Toronto Stock Exchange (TSX) Official Market Data and Company Filings.
Disclaimer
Neither the author of this article nor JuniorStocks holds equity, stock options, or any other financial positions in Cenovus Energy Inc. (TSX: CVE), Strathcona Resources Ltd. (TSX: SCR), Ovintiv Inc. (TSX: OVV), or any other companies mentioned in this publication. This content is published by JuniorStocks strictly for informational purposes, was prepared independently without company compensation, and utilized AI assistance for text editing, formatting, and generating accompanying media. While the Canadian energy sector and global crude oil markets represent compelling areas for market analysis, this article does not constitute investment or financial advice. Investors are strongly advised to conduct their own thorough, independent due diligence and consult with a qualified financial professional before making any investment decisions.