skip to content
  1. Home
  2. >
  3. Investment Q&A
You can view 3 more answers this month. Sign up for a free trial for unlimited access.

Investment Q&A

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

Q: Hi 5iR, I have been out of investing in energy stocks for a while, however with oil back down in the low $50.00 range I'm reviewing a few names. TOG and SGY appear to be very attractively priced and pay an excellent dividend. I can't seem to find any negative analyst reporting on either one?? Maybe that's telling me something?? In addition, TD has just raised its' target price on both of them and TOG has increased it's dividend. TD's Target Price on TOG is $8.50, which would mean better than 100% upside at todays price of $4.00
The story with VET is a little cloudy......they do have a lot of debt, but the management team is excellent and the European exposure means more cash for their product.
My questions are: is the oil sector a place to start allocating some funds now and how do the above names stack up as investment choices?
Thanks Team. Cheers, Chris
Read Answer Asked by Chris on June 06, 2019
Q: Comment from Tony Marino president and CEO at VET at RBC global energy conference this week:
Under the current pricing environment, the company believes its dividend and capital program to be over-funded.
Vermilion expects to cover its dividend plus sustaining capital spend at a US$40/bbl WTI price, with growth capital covered
at US$50/bbl.
The company observed its elevated dividend yield but affirmed commitment to its current levels.
Reassuring for those worried!
Read Answer Asked by Denis on June 06, 2019
Q: I'm down on a full position in VET and thinking of swapping it for a reduced position in SU partially for the capital loss, partially to reduce my full energy holdings but also for more stability with SU. I think SU is vertically more diversified and bigger and therefore better for a conservative retired investor like me. Does this sound like a reasonable plan or should I just hold cash and rebuy VET in 30 days and go on enjoying the higher dividend it offers?

Another reason the Su interests me is that VET's high dividend is nice but worries me. Other times I've held on to a company with a high dividend I have ended up with a capital loss that far outweighs the accumulated dividends. I would like to know if you consider VET's or SU's dividends "safer"? What might cause either of them to cut their dividend.
Two questions I guess.
Read Answer Asked by Brian on June 03, 2019
Q: Hi 5i,

My question is in regards to tax loss harvesting. I am down, in our non-registered accounts, anywhere from 10-30% on Magna, Methanex, NFI, Vermilion, and Great Canadian Gaming.

I like all of these companies and would like to have them in my portfolio as long term holds. My time horizon is years, if not decades. I don't mind the volatility of these stocks at all, nor do I mind being down (on paper) significantly at any point in time with them - I understand these are cyclical names. Dividends, and dividend growth, from most of them ease any short term frustration.

All of that said, would you recommend crystalizing a loss on any of the above? Do you see any catalyst for short term price jumps (earnings?) that may cause me to get caught buying back in at a higher price in 30 days? And if harvesting a loss is the way to go, would I be better off keeping the proceeds in cash to buy back in after waiting? Or park it in comparable securities? If so, any suggestions?

Dollar-wise, the amounts are significant enough that trading costs aren't really material. The only other variable I should mention is that I don't have any capital gains (realized) to use the losses against, so it would just go "in the bank" to be carried forward to the future.

Lots of parts to that question so deduct credits as necessary.

Thanks, enjoy the long weekend!
Read Answer Asked by Ryan on May 21, 2019
Q: With the most recent slide I am sitting on a $3000 loss in VET, my only full position in Energy, also have a half position in Meg. For tax planning I'm considering selling VET. Do you have a recommendation for a replacement Energy company with a similar yield to replace, or would you sit in cash for 30 days and repurchase VET ?
Read Answer Asked by Charles on May 17, 2019
Q: Could you comment on vet dividend. In this environmental world were in, the sector is not the best. I find when the dividend is 6%+ it usually results in lower stock prices eventually.
I ‘am fine with 4-5% dividend and a well run company with a increasing share price ( hopefully). Is vet not sacrificing a more stable share price for a high dividend? I have always felt that too high a dividend 6-7%+ was always a problem in the long run.
Having said that would you consider vet a long term hold?
Read Answer Asked by Brad on May 06, 2019
Q: I have not ventured back in to the gas/oil sector yet but thinking of doing so. Do you prefer services or producers at this point? For producers, do you prefer gas or oil or a mix? Could you give me a couple of your favourite names that you suggest I consider for getting back into the sector? I have a long time frame, medium tolerance for risk and like growth. Thank you for all your help.
Read Answer Asked by Donna on April 29, 2019
Q: Good morning 5i team
The 2018 audited statements say VET recorded a $128 million "Gain on business combinations", which were 1/3 of the co's. net earning for the year. $68 m gain came from assets acquired in Wyoming, and $59 m from acquiring Shell E&P Ireland Ltd. Notes to the statements say the gains came from ... changes in values from when the purchase agreements were entered into, compared with when the transactions closed, in the following two areas:
- recognition of additional reserve value (in Wyoming), and
- increases in the fair value of capital assets (in Ireland)
These gains do not impact 2018 operating cash flow numbers, but to someone without industry experience, they raise questions. That said, please advise,
- How unusual in 5i's experience are these types of gains in energy company acquisition transactions?
- Does this raise any red flags in considering an investment in VET?
Thank you.
Edward
Read Answer Asked by Edward on April 26, 2019
Q: Which TSX-based mid-sized (and larger) oil and gas explorer/producers, with strong balance sheets, would 5i most favour for a recovery in the Canadian resource sector?
Thank you.
Read Answer Asked by Edward on April 23, 2019
Q: Hi 5i - I have 10% invested in these energy stocks, now worth 5% of my portfolio. Would you put any new money in any of these to take advantage of the run up in oil? Or just sit tight and hope for a recovery (or sell outright)? Thanks, Neil
Read Answer Asked by Neil on April 12, 2019
Q: Good afternoon gang
I am underwater in all of these stocks in one of my non registered accounts. I would like to sell and then buy back in 30 days or more in my TFSA or RRIF (not sure which). Do you feel any of these may pop up within that time frame? With that in mind in what order should I sell first..to last? Your suggestions will be greatly valued as always.

much thanks
Read Answer Asked by El-ann on March 22, 2019
Q: What would be your top 5 stocks to purchase today in the Energy sector? CDN or US. (You guys are the best)
Read Answer Asked by Stan on March 21, 2019
Looking for more? Sign up for a FREE 14 day trial! No credit card required

We invite you to sign up for a 14 day free trial of 5i Research!
Experience all the benefits and tools we have to offer; stock research, model portfolios, Q&A with our experts, and so much more. Join a community of like-minded investors today!