Noah Barrett is a Research Analyst at Janus Henderson Investors and lead on the firm’s energy and utilities research team. Prior to joining Janus in 2015, he served as Vice President with Institutional Capital LLC, specializing in analysis and stock recommendations for the energy and transportation sectors. Mr. Barrett’s experience also includes working as an equity research analyst with Fiduciary Management Associates LLC and as an associate in the credit risk management department at Morgan Stanley.
In this exclusive 3,072 word interview with the Wall Street Transcript, Noah Barrett reveals the investment recommendations he thinks will work best in 2019. His analysis is based on a body of work from his team:
“One thing we pride ourselves on is doing a lot of in-depth, grassroots research, and we feel our edge is understanding the companies, their business models and management incentives better than our peers.”
The oil price for sustainable free cash flow has dropped, creating an opportunity for investors:
“Specific to the E&Ps, one thing that we’re focusing on are E&Ps that can deliver free cash flow at some reasonable oil price, and we define reasonable as $50 WTI. If companies can set their budgets at $50 WTI, grow production at some high-single-digit, low-double-digit rate while spending within cash flow and, more importantly, generating some excess cash flow, I think those companies will be rewarded in the market. Three to four years ago, you’d be surprised if any U.S. onshore E&P could generate free cash flow at $50 WTI, but I do think there are some companies today that can actually deliver on that promise.”
One pick among many is EOG:
“In E&P, my favorite name is EOG Resources (NYSE:EOG). It’s always been viewed as a best-in-class E&P and, as a result, has usually traded at a notable multiple premium to its peer group. Recently, that relative premium has compressed quite a bit, and I see an attractive entry point to buy a best-in-class E&P that’s trading at a slight premium to peers versus its historical average. We like a lot of things about EOG, including its strong track record of operation excellence and the company’s differentiated culture.”
To get all the picks, and Noah Barrett’s complete picture of the Oil & Gas Sector, read the entire 3,072 word interview in the Wall Street Transcrpt.