(Re-published with permission)
Value investors often seek out the proverbial best house in a bad neighborhood when investing in cyclical companies. That explains why Bastion Fiduciary’s Cale Smith is high on the investment prospects today for Diamondback Energy.
“Fifteen years ago you almost needed a degree in geology to invest in E&P companies,” says Smith. “In the last couple of years it’s become all about free cash flow and free-cash-flow yields. That’s right in the sweet spot of value investors.”
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