Section1: Company Overview and Fundamental Insights:

1.1 Company Overview:

Vermilion Energy Inc (TSX: VET) is an international oil and gas producing company. It engages in full-cycle exploration and production programs that focus on the acquisition, exploration, development, and optimization of producing properties in North America, Europe, and Australia. The majority of Vermilion's revenue has derived from the production and sale of petroleum and natural gas. Kalkine’s Resource Report covers the Investment Highlights, Key Financial Metrics, Risks, Technical Analysis along with the Valuation, Target Price, and Recommendation on the stock.

1.2 The Key Positives, Negatives, Investment Highlights and Risks

1.3 Top 10 Shareholders:

The top 10 shareholders together form ~17.56% of the total shareholding. The Vanguard Group, Inc. and Columbia Threadneedle Investments (US) hold a maximum stake in the company at ~­­­3.57% and ~2.57%, respectively.

1.4 Key Metrics:

The company reported lower production in Q3 2023, compared to pcp. However, it clocked sequentially improving liquidity profile which is a key positive. Additionally, it reported a decent jump in free cash flows on a sequential basis, displaying its strength and adaptability.

Section 2: Business Updates and Financial Highlights

2.1 Recent Updates: The below picture gives an overview of the company’s recent activities, such as an announcement regarding increasing its stake in Coelacanth Energy Inc.  and dividend distribution.

2.2 Insights on Q3 2023 Financial Performance:

Section 3: Key Risks and Company Outlook

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary:

The stock has witnessed an upside of ~2.06% and ~4.14% over the last 1 week and 1 month respectively. Moreover, the stock is trading below the average of 52-week high price of CAD 21.60 and 52-week low price of CAD 13.30 providing an opportunity to accumulate the stock.

4.2 Fundamental Valuation

Valuation Methodology: EV to Sales Based Relative Valuation (Illustrative)

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is February 22, 2024. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Dividend Yield may vary as per the stock price movement. 

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.