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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: Our weight in VET has now dropped to 1.9% so I think I should either sell it or buy another $15,000 to increase the weighting back up to 3%. The only other energy stocks we own are CMG and PEY with a 2.5% weighting each. We have 27 separate stocks & ETF's and I believe you think 20 is the right number so selling VET may make some sense. Do you still feel VET's dividend is secure? Maybe I should just do nothing - any suggestions?
Read Answer Asked by James on August 24, 2015
Q: I sold VET in May at 55.31. I'm looking at it now at 50, with a dividend of over 5%. Do you think this is a good time to get back in or would you wait to see some strength in the share price. My other energy holdings are IPL, PPL and PEY. They are around 7% of my portfolio.
Thanks for your invaluable insight.
Read Answer Asked by Andrew on July 15, 2015
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?
Read Answer Asked by Graeme on December 04, 2014
Q: A comment to Marc's question.

Note that, as of Feb.10, 2015 (i.e. one year before maturity), Vermillion can redeem ("call") this bond at 100% of face value (plus any accumulated interest), i.e. without any additional "sweetener". If Vermillion feels that it can refinance this debt in the current environment with a better interest rate than 6.5%, it is quite likely to be redeemed and you likely will actually lose a bit of money (based on your above-par purchase price).

I suspect that this is the reason that the apparent >4% yield-to-maturity looks so attractive for such a short-term holding, since it is quite likely that the bond will be called.
Read Answer Asked by Gregory on November 14, 2014
Q: Peter and Team,

There is a bond in the "high yield" category available through my broker for Vermillion Energy. The Maturity is Feb. 2016 and it is showing a coupon of 6.5% and an ask price of $101.850. I like the short duration and I think the yield looks good. Any thoughts and buying or not buying this bond? My aim is simply to buy the bond and hold to maturity to collect the yield and then get my principal returned.

Marc
Read Answer Asked by Marc on November 14, 2014
Q: Hi guys,

Like most Canadian investors, I was overweight the energy sector going into the last correction at about 24%. I would like to reduce my energy exposure to about 15%. My current holdings, in equal amounts, are CNQ, SU, CPG, POU, TOU, VET and KEL. I want to keep CNQ and SU since they have good dividends, which are growing steadily over time. I want to replace CPG with WCP since I've lost patience in CPG's repeated share issuances. I plan to sell POU and KEL since they don't have dividends and KEL is not cheap and POU has high debt levels. My final decision is between TOU and VET. I'd like to keep one and sell one to have 4 holdings for about 15% weight. Your thoughts?
Read Answer Asked by Jason on November 13, 2014
Q: My portfolio weighting of VET is about 4.6% but I am currently down 11% since
this summer. If this decline is mostly commodity related and sector-specific ,
do you foresee any decrease in surplus supply with a potential share price increase during the upcoming winter season ? Do you feel that this is a long-term trend due to oversupply from shale and fracking projects?
Read Answer Asked by Oleh on October 08, 2014
Q: Hello, when looking at oil and gaz exposure in a portfolio, I assume you combine oil and gaz service companies and producer to assess your overall risk. I was interested in those names: FRC, MCB, VET, PEY and BDI to build a new portfolio. Which ones would you combine or should I buy a smaller piece of each name ? Do you find those names decent buy at the momen ? I can take some risk and anticipate to hold for 5 year +. I would appreciate your general comments. Thank you.
Read Answer Asked by Pierre on September 15, 2014
Q: I have owned and added to Husky HSE for a number of years and my cost base is precisely where the stock price is now. So the dividends have been my only return to date, and the company has made it known there will be no div. increases for the next couple of years. I know you have a good opinion of HSE, as do I, but I'm wondering whether it'd be advantageous to switch into Vermilion (similar dividend but better growth opportunities?). Thank you
Read Answer Asked by chris on August 11, 2014
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