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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: My longest holding (20 yrs) is FRU which I have sold down over the good years, but still held some through lots of up and downs. I have held VET but eventually sold after its big run up in 2014. I am thinking of switching my remaining (and only O&G stock) FRU for VET. I invest for income, preferably with some growth prospect. However, I believe there is a possibility of CN (I think) taking FRU private and would be disappointed to miss out on the usual take over premium. Your thought would be appreciated.
Read Answer Asked by David on October 13, 2016
Q: Hey 5i team, this is my first question here. I have recently finished school, and have opened a TFSA. I am looking to start a portfolio, and am willing to hold investments for up to five years. I was looking into the energy sector, and like CPG, and CVE (for growth potential), and VET (for their dividend). Would you recommend one over the other (or anything else), or would you recommend averaging between the three?
Thanks,
Mark
Read Answer Asked by Mark on September 09, 2016
Q: I have a 3.5% position in CPG, and I have a 1% position in TOU and a 2.5% position in VET. My overall exposure to energy is around 12%. I am not looking to decrease my energy exposure, but I am considering consolidating my position into fewer names. Would you consider a transition from CPG to either TOU or VET to be a sound move, and if so, which would you choose? VET offers a better dividend, but TOU is better positioned to take advantage of a rise in natural gas, which seems like a real possibility over the next 3-6 months. Thanks so much!
Read Answer Asked by Domenic on September 06, 2016
Q: Hello Peter,
Mr. Seymour Schulich, continues to increase his holdings in Birchcliff Energy. Do you see this as a good sign to enter the name? It has risen quite a bit so am a bit reluctant. Do you still like Gold standard ventures and lastly would you consider Vermilion energy as a conservative play on energy? My concern is that it dropped quite a bit from a few years ago and is recovering very slowly. At the current rate, can you see the stock doubling in atleast 5 years. Thanks
Read Answer Asked by umedali on July 18, 2016
Q: I have owned both companies for a couple of years and am down about 50% on SGY and 80% BTE. Combined, they are less than 5% of my portfolio. My question is whether I should just ride these out and wait (hope) for higher oil prices with these names or is it wiser to sell and replace them with a "better" name. I am thinking of VET, partially because of the dividend. I can't decide if the better strategy is to stay with my current holdings as I think they could provide more potential growth or if the risk is too high for their continued existence and a switch to a more stable company is warranted. I would like to keep whatever money this represents in energy.

Appreciate your insight.

Paul F.
Read Answer Asked by Paul on July 15, 2016
Q: I hold TOU, ALA, KEY. Down 18%, 24% and 13% respectively. This is all my direct oil/natural gas exposure which represents 17% of my entire portfolio.
I have 10+ years investment horizon for these stocks. These stocks fluctuate a lot which I don't mind but I dislike being underwater for a prolong period of time.

Should I stick with these names or should I make a switch to other oil companies like VET? If yes what names would you suggest and how should I divide the investment % wise? Which stock(s) to sell and which one to keep? Switch now or later?

The goal of the switch is to position myself for eventual(I believe) oil recovery.

Appreciate your insight.
Read Answer Asked by JR on June 15, 2016
Q: I am a retired, conservative, dividend-income investor with a pension, CPP, annuities and hold the following securities (AD, AQN, ALA, BCE, BNS, CPG, CGX, ECI, FTS, PBH, RY, WCP, WEF, WSP, ZLB, XIT, RBC Cdn Equity Inc, Sentry Cdn Inc, Sentry REIT, and Fisgard Capital).

I plan to sell CPG and capture a capital loss, while at the same time put some or all of the proceeds towards another energy name, thereby increasing my dividend income. I have filtered the following names, using P/BV, D/CF, Beta, Div Yield => CJ, FRU, VET (I already own WCP, ALA, TRP).

Which do you see as a good fit with my other holdings? I am leaning towards CJ (more torque) or VET (due to the larger size). Are both of their respective dividend "safe"?

Thanks...Steve
Read Answer Asked by Stephen on May 30, 2016
Q: I have TORC (TOG)and Whitecap (WCP) each representing a little over 1% of my portfolio. I am up on TOG and down on WCP.

I was thinking of selling Whitecap to capture the capital loss and to replace that stock with a name of equal (or greater quality) that also pays a monthly dividend. What would your top suggestions be? I was thinking perhaps Cardinal (CJ) or Vermillion (VET) but I'd greatly appreciate your opinion and insight.

Thanks.

John
Read Answer Asked by john on May 06, 2016
Q: Thinking of dipping my toe back in the energy sector. Many co's stocks have made significant moves already, even following last weekends failed agreement. Vermillion seems to be well regarded, is 50% off it's high and yet hasn't jumped, so would this be a good choice? Are there others similarly lagging the early leaders that are worth considering.
Thanks Peter.
Read Answer Asked by Peter on April 20, 2016
Q: I have a good proportion of my portfolio in the US, so its value is very dependent on the US$/CAN$ exchange rate. Now I would like to increase my investment in energy with a view to a hedge against the rising CAN$. Can you recommend two reliable dividend paying stocks whose value is highly correlated to the CAN$, and which preferably have some growth potential too. I already own SU and CNQ.
Thanks for your help.
Chris
Read Answer Asked by CHRISTOPHER on April 20, 2016
Q: Hello Peter and the 5i team

I have been starting to look into the energy sector as I think there will be a slow and steady increase in oil prices over the year (I think there will be dips back down but these dips will not be as low as the previous ones higher lows and higher highs as the year goes). What do you think of Vermilion energy? I look at the numbers and it seems to actually have a fairly large amount of debt (comparable to that of BTE on a total debt to capital ratio, although it hasn't had the bad press about its debt compared to BTE). It has a higher price to book. Management seems very good though and I like that it is diversified on a global scale and doesn't have its oil land locked in Alberta like many Canadian oil companies. What are your thoughts on the company? If you don't like it what energy names do you like better.
Read Answer Asked by Darren on March 08, 2016
Q: You previously mentioned that VET has "a fairly large debt level based on cash flow". and that "in the 3Q had $122 million in cash flow and paid $26 million in dividends, for a ratio of 21%".
Have these numbers changed at all - ie.- how much cushion does VET have to continue paying their dividend at the current level going forward or has their ability to continue "not cutting" their dividend been compromised?
Read Answer Asked by Alan on February 11, 2016
Q: I spoke to the head of IR at this company based in Calgary a few weeks ago because I am a long-time SH and was concerned about the dividend being cut going fwd. He was quite sure it would not be cut even though, as I pointed out, they carried a fair bit of debt. - build out Corrib in IRE - on stream soon - Dec. 30th started pumping - 30% increase in cash flow: pay down debt. As well reduced capital budget for 2016 which would support the dividend which he deemed quite sacred. Comments please?
Read Answer Asked by James on January 04, 2016
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