PrairieSky Royalty Ltd (TSX: PSK) is a Canada-based company, which offers a portfolio of royalty lands in Canada. he Company’s asset base includes a geologically and geographically diverse portfolio of Fee Lands that encompasses approximately 7.8 million acres with petroleum and/or natural gas rights, an additional 1.1 million acres in coal only titles, and approximately 7.8 million acres of GORR Lands and other acreage.

Why Investors Should Book Profit?

• Stretched Valuation: From the TTM Price to Earnings standpoint, PSK shares are trading a significantly stretched valuation, as TTM PE of stood at 32.84x vs industry median of 3.3x. We believe this gap could narrow down through price consolidation in PSK shares.

• Technical Reversal: A dark cloud pattern appeared on the daily price chat after a solid bull-run, which indicates there could be a possible trend reversal.

Technical Price Chart (October 21, 2021). Source: REFINITIV, Analysis by Kalkine Group

• Double Top Appeared on Daily Price Chart: A double top kind of candle pattern appeared on the daily price chart, and stock has not able to break the neck decisively, instead it has come off from that level, implies that stock might correct from the current trading levels.

Technical Chart (October 21, 2021). Source: REFINITIV, Analysis by Kalkine Group 

Valuation Methodology (Illustrative): P/E- Based Valuation

Stock Recommendation: Given the significant stretched valuation of PSK against the industry median and reversal from bullish momentum could bring some consolidation in the stock in near term. Hence, we recommend a “Sell” rating on the stock at the closing price of CAD 15.48 on October 21, 2021.

1-Year Price Chart (October 21, 2021). Source: REFINITIV, Analysis by Kalkine Group

*The reference data in this report has been partly sourced from REFINITIV.

Disclaimer

The advice given by Kalkine Canada Advisory Services Inc. and provided on this website is general information only and it does not take into account your investment objectives, financial situation and the particular needs of any particular person. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. The website www.kalkine.ca is published by Kalkine Canada Advisory Services Inc. The link to our Terms & Conditions has been provided please go through them. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations later.