Investment Q&A

Q: Is this coy still going to be able to maintain their dividend,
I recently bought ,but it keeps going down Brian

Q: This question may be duplicated. Something awkward happened during submission. Please delete if you got this twice.

I have very little exposure in oil and gaz, owning small portions of companies indirectly associated to the industry - QST, LSI and WPT/CLNE (big mistake). I have been closely monitoring the questions on O&G and would like to participate in its eventual success. I have seen questions on Surge (SGY), Spartan (SPE), Whitecap (WCP), Vermilion, Black Diamond, Peyto (PEY) and Tourmaline (TOU), High Arctic Energy (HWO), Baytex (BTE) all of which appear to be well liked (but I can't buy them all). I have also seen comments on others such as RMP Energy, Raging River, Rock Energy and Parex PXT which are debt (or close to) debt free, which is very important in these strenuous times.

I am a very long term investor and would like to keep my risk to a minimum. Normally, I am open to more risk but I believe that there is sufficient blood on the street that we can obtain high quality businesses at same discounted prices. It is like going to store. Sometimes you can buy a high quality item at same or better price than something that is greatly inferior. It really depends on what is on special.

I would like to consider 2 O&G businesses that offer growth and 2 larger O&G businesses that offer good stability that will also bounce whenever the time comes. These companies may be on the above list or not. What do you believe are the best growth / stable companies on special that are of high quality and why?

I also have a side question. I am not very familiar with cyclical companies. Will I need to get ready to sell these stocks when they go back up OR do good cyclical companies have higher highs and higher lows over time? i.e. Can these be good long term investments?

I hope that we do no inundate you with too many questions but the feedback is priceless. I am definitely learning a lot by reading the feedback you provide to all of us. Thank You.

Q: Hello Peter
Please provide me about two stocks names that you think may have the most upside with the current oil price decline .
Thanks
Warmest Regards
Claudio

Q: Do you think the dividend cuts to the energy sector are priced in yet?Is this a good time to start a position? It is near its 52 week low.

Q: I believe that SGY will rebound sharply but want to use a five figure loss to reduce my capital gains this year. In the meantime what stock or etf would you recommend to replace SGY either temporarily or long term.
Thanks for the great service you provide.
Alex

Q: Cequence has taken it on the chin like all other stocks in the energy sector. Are there any concerns going forward or is it simply caught up in the selling tsunami? And if it is the later is it now cheap enough to consider adding to my position? I'm thinking a number of the energy stocks should have a fair size bounce in the new year. Your thoughts would be appreciated.

Q: Would appreciate a current opinion on Parallel Energy. Thanks

Q: Hi - the shares have been crushed in the sell off, are they a likely target or can they do the acquiring in this environment? what is their balance sheet like and any dry powder ? thanks

Q: Hi Peter and company. I would like a look into these as we head into tax loss season. I am interested in your analysis in these holdings... JOY,WRG. I spoke to management about the dividend in JOY but I do not trust the answer I received. Your thoughts... If I could impose these two I recently purchased for catalyst's in the near term... POE, MMT... I read many things on these company's from a variety of sources but they lack your honesty with NO BIAS.
Thank you as always Jason

Q: I hold Baytex in my TFSA. If I sell, I cannot claim any capital loss in this account. With COS cutting their dividend, I'm starting to think Baytex will be next, and then go down even more? What do you recommend - sell and replace with a better energy stock with a brighter future and better chance of recovery - or hang in for the long term with Baytex?
Thank you.

Q: Dear Team - could you please give us your thoughts on Mart? Two very significant and positive NR's were released and a 3rd should come before Christmas on the closing on OML 18. The stock is still down YTD and things have never looked better for the company. Thanks for you feedback.

Q: Hi Peter and Team, this is about the news that COS would be cutting its quarterly dividend by nearly 43 per cent. I have made a quick calculation, and based on the closing price of today of $10.98, the new yield would be of about 7%. Does my calculation make sense? If yes, is it okay to buy COS shares at this price? Thanks, Gervais

Q: hi folks,with cos/t cutting dividend 42% and production where CFPS15E decreased app $2.52 to $1.65,is this stock an avoid or is all bad news factored in and worth starting a position around $11sh,thanks as always,jb

Q: http://www.stockhouse.com/companies/bullboard/t.cos/canadian-oil-sands-limited?postid=23197193

Mr. Hodson, at the risk of annoying you, I am providing this analysis with respect to Canadian Oil Sands (COS), which goes along with yours, and maybe further (as it is backed by actual buying of the stock). Was today's price a 35-65% discount and are reserves to last 90 years ? Do you foresee oil and COS substantially higher within the next year ?

Again, this is a private question, but feel free to let other members view your response if you think this is useful ?

Q: Hello,
With what is happening in the oil sector, can you list a few names that you would buy and hold for 5 year plus. I can take some risk (ok with smaller cap) and i don t need dividend. Also, please fell free to add names in other sectors if you feel they are treated unfairly. My approach would be to buy half now and the rest mid january. Thank you.

Q: On the oil getting whacked theme, have you guys looked a PRE today? Down to $8.20. They are forecasting the following:
A base case average WTI oil price assumption of $70.00/bbl during the year and the 2014 average Brent-WTI benchmark price differential.
Oil price realization is expected to average to approximately the WTI benchmark price assumption.
EBITDA of $1.9 to 2.1 billion and Funds Flow (Cash Flow) of $1.45 to $1.55 billion.

So the company is currently trading at just over 1X EBITDA and 1.5X Cash Flow. They do have debt on the balance sheet but at low rates strategically and are long term. Unless oil stays well below $70 for a very long time valuations like this seem crazy. What am I missing?

Q: Despite all the negatives about this company and lack of confidence even by the directors (based on their sales of stock), I see the CEO has been continuously purchasing shares from February to the present. He had about 100,000 and now has about 450,000 (direct and indirect). Is he an idiot or should I be following his lead? As always, I very much appreciate your opinion

Q: Hi,

I bought this a couple weeks ago thinking it was over sold. Was I wrong! I'm down 25% in a couple weeks and it keeps dropping. I read of fears with the dividend and price target cuts to $74! What do you make of this? I'm happy to hold for a long time but worry that, like ACQ and AVO, logic has nothing todo with it. Should I sell?

Q: Enbridge is up substantially today (Great!), but I'm not sure why transferring $17b to anther company creates so much value?

Poor old BDI, what did they do to deserve this drubbing?

Your thoughts as always, are greatly appreciated.
Mike

Q: I am looking at some of the oil stocks and see SGY and PD for example are trading at or below book and with a P/CF of less than 5 (based on stats from TD's web broker). Both pay dividends, though these may yet get cut a bit. Sure there is likely to be volatility for a while, but if not these, what metrics would you use to say it is time to start overweighting some of the sector?

Love your service!