Investment Q&A

Q: A few times I've seen replies to member questions about oil companies and their debt to cash flow metric (OXY and OVV ring a bell, and 5X and 3X respectively ring a bell too, if I remember correctly). Are you calculating this? I don't see it in security details in 5i or my broker's site (or on other finance sites). Is it a question of having to read the balance sheet and cash flow statement, and if so what are you comparing? "Total Debt" (rather than "Total Liabilities") to "Total Cash from Operations" for the year ? For OXY the data I get presented (source is Morningstar via online broker) are Cash from/Used by Operating Activities + Cash from/Used by Investing Activities + Cash from/Used by Financing Activities = Increase/Decrease in Cash, however, I'm guessing you just use the first number, which for 2019 is 7.3 billion (so 38.6 debt / 7.3 total cash from operations = 5X)...is that correct? or do you get the ratio from somewhere else? Thanks

Q: Hi folks,looking longer term, Whitecap resources wcp/t had fairly decent Q results with Paying down $100M in debt,lowered payout ratio to 72,and there has been lots of recent insider buying at higher levels. Stock currently crushed to 1.30sh level....aside from problems/negativity of world/wti oil....does Whitecap not seem like a reasonable buy here??? thanks as always, jb

Q: I know you are not a fan of Baytex. I hold it and Vermillion. Can I get your thoughts on their ability to survive this onslaught? I realize you have no way to know where oil prices will land and for how long they will stay depressed, but can BTE and VET take concrete measures to ensure they survive ?

Q: These companies are trading at close to 10% yield. The share price is back to where they were ten years ago and the dividends have since doubled. Are these companies not the buy of a generation right now? In my life I will likely never see these valuations again. Or I missing something huge??

Q: Oil analysts on BNN have said the producers with good hedges on will do the best through this price war and corona virus impact. What large, mid and small cap producers hedged out for several months this year or further? Thanks

Q: Can you please advise as to which large cap oil sands company have hedged their oil price exposure and for how long and which would u recommend among that list. Thx

Q: With the company size and global oil/gas outlook, would you expect ENB to recover what it has lost over the next 2-5yrs, or do you believe there is some risk they may never fully recover?

Q: What is the dividend for this company please.

Q: I wonder whether you could tell me what you mean when you use the phrase “do not need to be owned now.” I have both VET and WCP. WCP, at least was in the green for me until this sell off started, and higher fairly recently. Both were recently described as OK, albeit within a riskier sector.

I might not “need” to own them, but I do. Selling now would lock in a massive loss, percentage wise, and provide little capital to redeploy.

I’m not asking that you advise me to sell or hold, but in such circumstances, were it you, would you take the loss (non taxable account) and buy a tiny amount of shares in something more stable, or would you do nothing except turn off the TV, stop reading questions like this, and come back in a few months?

Q: Would you sell VET and WCP or hold? Would you recommend that energy stocks are not needed in a portfolio, even though we "should" have all sectors represented?
Thanks for your service

Q: Following up on my hedging question, any thoughts on which companies Nuttall is referring to in this excerpt from his newsletter? Thx


what were we doing yesterday? We sold our one US name and bought a low-cost oilsands producer whose stock was down by 50% (the Fund now has 100% Canadian content…Canadian producers at least benefit from a $0.73 loonie when they sell their oil in US dollars but have operating costs in $CDN). We added to another oilsand name that is 55% hedged this year at $59WTI (with swaps) as the stock collapsed by 56%. We also went through the structure of the hedge books of our positions and trimmed exposure to any name that may fall into trouble if the price rout lasts for longer than 6 months. Now is not the time to take on extreme risk. Our goal is to be in companies that can weather this storm as best as possible to allow us to be fully exposed to the sector for the inevitable turn. All it will take is one headline about a Saudi/Russia meeting and energy stocks could easily gap up by 20%+ in a day…if you’re not positioned for that event human psychology will prevent you from chasing the rally hoping for a pullback that may never come.

Q: With the current oil situation what is the future of these stocks and which ones would you sell now

Q: Hello,
Will ARX become another VET ?
Dividend now at 16.5 %.
Thank you

Q: This stock has really been knocked down. What is your opinion of this stock? About a month ago, RBC recommended it at around $35 U. S. It is now around $10 U. S.

Q: In your estimation, can these 2 companies survive until we see a recovery in the oil price/sector?

Q: Given what’s happened in the energy sector this week can you please give me your thoughts on Calfrac’s future solvency. Do they have the ability to survive another round of turmoil? Thanks.

Q: What is the debt for these companies? What are the investing risks with either of these companies?
Thank you

Q: Both of these stocks are getting hammered - yesterday and today. Is the market concerned about counterparty risk here? If so, which company is more exposed to customer default?

Q: Peter and team
I have held ZEO outside of my balanced portfolio for several years now. As of today it has lost half of what I paid.
Even though it is compromised of the bigger players I am still worried about the solvency of some of the companies. Are there any in this ETF that cause you concern and do you feel this is safe "hold" for the next few years while awaiting recovery.
Thanks
Phil

Q: Hi, I am down $18,433 on Baytex energy on 1000 sh bought over 16 years ago. (yeah I know stop loss) Yes, there is no need to sell it but I would appreciate A professional opinion on this sector.
Canada is in a very difficult place and we are being squeezed from many sides and in many ways. In this sector what do you recommend, to actually make money in the next 1- year. Thanks James PS I have been patient long enough.