I’ve initiated a small but strategic position in Hemisphere Energy $HME (+0.84%) a lesser-known Canadian oil producer that ticks many boxes on both value and quality screens.
Despite flying under the radar, HME boasts an impressive P/E of just 5.1, ROE of 46.6%, and a healthy PFCF ratio of 5.79 — all signs of capital efficiency and strong profitability.
The 🦆 Score comes in at 97, and it earns an “A” grade on my Warren Buffett-style scorecard, which is reserved for high-quality compounders with solid fundamentals.
📊 What stands out is:
- High insider ownership and no excessive dilution
- Free cash flow generation despite its size
- A debt-to-equity ratio under 0.1
- Strong operating margins and a current ratio above 2.5
- Conservative payout and capital structure
It’s also still trading at an estimated ~14% discount to fair value, with an “Acceptable Entry” zone confirmed by technicals and my model.
This is a Core Stock position in my strategy — not a flashy trade, but a quietly efficient business that could deliver strong total returns through disciplined growth, capital returns, or eventual revaluation. 🛢️📉➡️📈
