Pro Picks: 3 Unloved Energy Stocks

Investment ideas from Josh Young of Bison Interests

Pro Picks: From Alberta to the Permian - Josh Young’s Top Oil Stock Picks

Watch full episode: Oil prices are stuck, energy stocks are sliding—but are investors missing the upside? In this episode of In the Money with Amber Kanwar, Texas-based energy investor Josh Young, founder of Bison Interests, lays out his contrarian thesis on the oil market, revealing why he believes the best opportunities right now are in small and mid-cap names, particularly in Canadian oil stocks.

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1. Journey Energy (JOY.TO) – TSX

Journey Energy has been a tough hold, grinding lower amid operational and governance challenges. Yet, Josh remains optimistic about its potential.

• Why Josh Likes It:

  • Massive Asset Value: Journey’s conventional assets hold hundreds of millions of barrels of recoverable reserves, potentially worth 5–10x the current share price in a higher commodity price environment. The Duvernay shale project, partnered with Spartan Energy’s proven team, could alone match the current market cap.

  • Power Generation Upside: Delayed power generation projects, once online, could add value equivalent to the entire market cap, offering a significant catalyst.

  • Governance Catalyst: A board shakeup at AIMCo, a key shareholder, and broader pension fund reforms in Alberta could drive management and governance changes, unlocking value. Josh believes these changes are imminent, potentially accelerating Journey’s turnaround.

Upside: The stock could trade at multiples of its current price if conventional assets are revalued, power projects come online, and the Duvernay asset delivers, with governance improvements acting as a near-term trigger.

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2. Ensign Energy Services (ESI.TO) – TSX

Ensign Energy Services, a drilling rig company, has underperformed due to market aversion to drillers and perceived debt concerns. Josh sees a mispriced gem backed by strong ownership.

• Why Josh Likes It:

  • Deep Value Metrics: Trading at a 30–40% free cash flow yield, a third of book value, and a fraction of replacement cost, Ensign is wildly undervalued compared to peers like Canadian Natural Resources (7x EBITDA). It’s paid down $600M in debt, reducing leverage significantly.

  • Strong Ownership: Over 30% owned by Murray Edwards, a highly regarded energy investor, and supported by Fairfax Financial (recently increasing its stake), Ensign benefits from credible backers who could spark market recognition.

  • Drilling Cycle Recovery: Josh believes the drilling rig count is near its bottom, with production declines and rising natural gas demand signaling a rebound. Ensign’s financial and operating leverage positions it to benefit disproportionately.

Upside: Debt paydown alone could unlock 50 cents per share annually (25% of the ~$2 stock price), with potential to trade at 3x EBITDA (vs. <1x now) if the market revalues it like Edwards’ other entities, offering multi-bagger potential.

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3. Vital Energy (VTLE) – NYSE

Vital Energy, down 50% in 2025, has been hit by unsuccessful exploration and skepticism about its acquisitions. Josh sees a misunderstood story with improving fundamentals.

• Why Josh Likes It:

  • Operational Improvements: Despite a failed exploration effort, Vital’s core operations have “improved dramatically,” with acquisitions of high-cost assets now proving their worth counter-cyclically.

  • Mispriced Valuation: The stock is “wildly inexpensive” compared to small-to-mid-sized Permian producers, trading at a steep discount to comps.

  • Market Misjudgment: The market overreacted to exploration costs, ignoring operational gains. As performance continues to strengthen, Josh expects the stock to realign with peers.

Upside: Vital could trade “multiple times” higher to match comparable Permian producers, driven by operational success and market recognition of its undervaluation.

DISCLAIMERS: The information provided in this podcast is for informational purposes only and does not constitute financial, investment, or professional advice. The views expressed by the host and guests are their own and do not necessarily reflect the opinions of any organization or company. The host and guests may maintain positions in any securities discussed on the podcast. Always consult with a qualified financial advisor or professional before making any investment decisions.