Investment Q&A

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!

Q: The other day Jeff Rubin, on BNN, talked about his 2008 thesis for $200 oil; and how the shift in world oil industry dynamics has altered the competitive landscape and hence oil prices. His current position is that oil prices will continue to fall until the high or highest cost producers cut back or shut down production, namely and mostly, Canadian Oil Sands players; but also US shale plays as well. Until these companies do cut back he expects oil prices to continue down. Where the bottom is no one knows.
In his mind, it is naive to look to Saudi Arabia (the low cost producer) to cut back at all.

Do you agree with his reasoning?
And do any oil sands or shale companies come to mind that might capitulate and reduce production?

Thanks again.

Q: Good Morning 5i team

Temperatures are dropping in the US big time and another cold winter is likely. Natural gas is a major fuel source for both heat and electricity. It is produced as we all know largely as an "associated gas" when oil is pulled out of the ground.

According to S&A Resource Report, Natural Gas supply/inventory is at a 5 year low in the US. And at $60 PB many of the oil producers will be shutting down less profitable wells in turn reducing NG production when it appears it may be needed the most.

My question is this... which well managed NG producing Canadian Companies would you recommend? And what is your view on my above comments?

Thanks for all you do

Gord

Q: To Rick's question of Dec. 1 regarding Birchcliff's dividend: Birchcliff's preferred shares pay 0.50 per quarter. There is also bir.pr.c, paying a bit less.

Q: Hi Peter and Team, Do you think that SGY's yield of 14.085% is sustainable until some stability returns to the oil market? Hopefully they won't do a "COS". Thanks!

Q: Hello, crazy times in the oil patch. I am hearing some analysts touting oil and worried about natural gas and of course lots of people saying the opposite. I do have Tourmaline which is down of course. Any sense switching for CNQ, or just let time do it's thing . I was going to wait until closer to the end of tax loss selling before making any changes

Q: I am thinking of putting a credit spred on this Oil etf .I want to go out to 2016 (jan)
Where would you think Oil`s range would be then ?$75-80 ? Is there a symbol that I can follow OIL-- on chart to plot 20-50-200 day average ?
Thanks ---great service ---great site
Don

Q: Would you consider Freehold Royalties a buy? Tx

Q: Hi Peter,

With the dramatic sell off in oil prices lately and all the talk of energy loans that the Canadian Banks have supposedly given. What effect will this have on the Canadian Banks, Should a person be trimming some bank positions? We are long term holders of TD, Royal and BNS( non registered accounts).

Thank you

Q: Husky has been a solid, steady investment for us for years but is now badly underwater. Hold or sell? Also, what is your opinion on Suncor. We have a full position. Hold or add?

Q: With the latest drop in oil prices and the volatility of this stock is there any point in holding onto this product or is it best just to take whats left and run?

Q: I have 200 COS @ $18. I'm considering exchanging them for an equal value of SGY because COS goes down when other oils go up, as happened again today. I suspect that SGY will increase faster than COS when the market turns. Would you recommend the idea? If you like the exchange idea, is there another energy you would switch to? I hold PKI and WCP. It may not show in this question but I appreciate your lessons in holding a long term steady hand. I'm leaving my other 15 stocks and 2 oils untouched.

Q: I have a little more than one half of 1% holding in SGY with a similar amount of WCP and RRX.I am thinking of doubling down on SGY. Your thoughts?

Q: I am trying to evaluate a purchase of WCP, ALA, KEY, ENB, IPL or PPL. PE ranges from 9.5 (WCP) up to 57 (ENB). Would you use any other ratio to determine best buy. Of these which do you consider best buy.

Thank You As Always
Craig

Q: Hello 5i team

second week March I bought RE @ $4.52. Sept 22 I sold at $6.88. Everything I read about this company (including your Nov 6 comment) tells me it is well managed and able to earn even with lower oil prices.

I am eager to get back in and am wondering what your recommendation would be at this time... i.e. wait or buy now.

Thanks for all you do

Gord

Q: Can you give me your take on IMO, because it is an integrated company, will the drop in oil be good for the products side of the business and take the stock higher?

Q: This question could apply to all dividend paying oil company's, SGY Div on the TSX now indicates 13%+ due to the lower stock price, how quickly do company's cut the div to bring payouts back under 100% of cash flow and get the div back to a reasonable value of say 8% , at today's price of SGY it looks very attractive to add to my position for the div. and potential oversold bounce in price. Most energy stocks seem to be oversold and trading at $40 oil values seen in 2008. Your thoughts please.

Q: http://email.seekingalpha.com/track?type=click&mailingid=2725315&messageid=2800&databaseid=&serial=2800O2725315O1417550693.ee8baa118f6bde76b6a9a57f2d931657&emailid=1079842&userid=1079842&extra=&&&3000&&&http://seekingalpha.com/article/2725315-canadian-oil-sands-whats-it-worth?source=email_rt_article_readmore&uprof=46

Mr.Hodson, this is a follow-up to my recent questions on Canadian Oil Sands Ltd (COS). The market is currently doing a carnage on COS, but this paper puts things in a different perspective. See also comments by Uncle Pie, who owned COS for a long time. To what extent do you agree with the author and Uncle Pie ? Should you think this would be useful to other members, feel free to act accordingly and let them see your response. It just does not make sense to discard a company that had better days, and still might continue to do so in the future, while having a superior product (SCO or synthetic oil). Of course, the market is king, and should it decide to punish COS, just like other oil producers (with regular Canada crude), it might be better to acknowledge the market is always right. What's the correct view in such a case ?

Q: Supposing we make the assumption that oil (WTI) is going to average US$60 over the next 5 years. Are there ANY companies in North America that could continue to operate at that price for that length of time? Secondly, if that happens how much of the world oil production would disappear? Thirdly, if this lost oil production is a substantial amount of world total production (which it must be because world oil production is way up over the last 5 years due to the NA shale boom), could it be replaced by the remaining oil producers (mainly OPEC)? If not, then would that not drive the oil price back up to well above $60.00?

Q: A while back I asked about WEQ WESTERONE INC. you felt it was Ok and new the management. Recently bought more at $5.75.Its now skirting 3.50> 4.00 range.
I am assuming the latest Qtr. was not great plus the pull back in oil prices are the culprit for the price decline?
Other brokerage firms have cut their target price off coarse after its fallen significantly.
Do you any updated insight into this company?
Thoughts on a dividend cut?
Where do you see this company going under the new CEO.
Should I sell as a tax loss. Originally bought 1K at 8.00 another 1k At 5.75???
Is this stock turning into a Yellow Media or Hot Water Fund debacle?
A.J.