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Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: I'm currently holding Crescent Point Energy (CPG) and Whitecap Resources (WCP). Over the past year, I've done well on Whitecap but remained relatively flat with Crescent Point. I'm now considering moving out of one of these two names and into Surge Energy as I feel the shares of SGY represent better growth potential while, at the same time, offering a comparably attractive and secure dividend.
Your thoughts please.
Read Answer Asked by Richard on January 13, 2014
Q: Hi Peter
Just a follow up on Crescent point energy if you don't mind. Looking at Q-3 cash flow of 543 million, less capital expenditures of 456 million gives them 87 million of free cash flow. My question is why wouldn't they take off the 115 million used for dividends and financing activities as well before arriving at free cash flow?

Thanks Gord
Read Answer Asked by Gordon on November 28, 2013
Q: I need some education. A high percentage of Canadian analysts recommend Crescent Point Energy (CPG). My own admittedly poor analysis shows CPG to have a net annual income of about $270 MM or about $0.55 per share…this seems to move around quite a bit quarter to quarter. Assuming I am in the ballpark, and since the current share price is about $40, this suggests a PE ratio of about 70. The current dividend of $0.69 per quarter ($2.76 per year) is not close to be supported by earnings so the company must be issuing new shares (DRIP program) and/or borrowing funds to pay the shareholders. When comparing very quickly using Goodle Finance to Vermillion, Suncor, CNQ, and Husky, I find that all are paying out more in dividends than they earned but none are as bad as CPG. If I am correct why is CPG the darling of analysts? Secondly, how can the other companies continue to pay more than earnings? Isn’t this a concern? Thanks in advance for the help in understanding both CPG and the oil and gas producers in general.
Read Answer Asked by ED on November 26, 2013
Q: Hope your European trip was enjoyable & profitable!
Would like to reduce my exposure to Western energy. Presently have ALA, ARX, CPG, PKI, PPL,& KEY - all in a cash acct. Have held all for about 4 yrs. & been quite profitable. Just too much concentration. As always your opinion & recommendations are appreciated.
Read Answer Asked by Robert on October 04, 2013
Q: I have owned Crescent Point CPG since 2008. I have been happy with the gains I originally made along with the nice monthly dividend. I think it is time to sell it given the rather poor performance that last few years. What would you suggest to replace it in this space? I don't have any other oil producers in my portfolio, just some pipelines. Joe
Read Answer Asked by Joseph on September 24, 2013
Q: Hi Peter & the 5i Team,

You've said in the past that CPG isn't your favourite company in the O/G sector and I certainly agree with that assessment. Based on my results, even with the generous DRIP program and its 5% discount, and after holding CPG for several years, I'm still slightly underwater. It appears that CPG is incapable of breaking through the $40 mark. (Although it pays a hefty dividend of over 7%, its price has flat-lined).

Many analysts rate CPG as "sector outperform" or "strong buy", etc. etc., but my results certainly prove otherwise. I have (fortunately) only half a position in CPG, and bought it at that time due to its inclusion as a so-called "dividend aristocrat", and not knowing about 5i. (!) So at the present, I'm frustrated knowing I'm not reaping the benefits of an alternative O/G stock like VET.

My question is this: What "non-emotional" criteria should an investor use to determine if and when a stock should be sold?

Thanks in advance.
Read Answer Asked by Jerry on September 12, 2013
Q: Given the tragic crash in Quebec involving oil on railcars what effect would this possibly have on companies like Crecent Point Energy that transport a lot of their oil by rail with the intention of increasing this? Thanks and keep up the good work. This service is excellent and one of kind available in Canada.
Read Answer Asked by LARRY on July 08, 2013
Q: Hi Peter, a long time fan and now a member. I have long been a big believer in the energy sector and am overweight, particularily Crescent Point (CPG). I spend the dividend from my RRIF. Everyone on BNN and analysts all love the stock but the market doesn't seem to. In the Globe's ROB Eric Reguly opined that global warming might cause a black swan type event that would force the world to leave hydrocarbons in the ground which would devastate my holdings. I have long been in the denier camp but am starting to question my position. Would appreciate your views on CPG, this whole thesis, and your view on the nuclear space, especially Cameco. I am seiously thinking of a major change in my holdings. Thanks. Robert
Read Answer Asked by Robert on June 30, 2013
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