Gerard FergusonAdvantage Oil & Gas LtdAAV.TOCOMMENTFeb 08, 2018

What to buy in energy should depend on your outlook for oil vs. natural gas. Oil has more downside if things start getting better in the Middle East. Nat gas has way more upside, so he'd go that way. Names he prefers to BIR are AAV, TOU, and PEY (in that order).

It is 85% natural gas weighted and he is not overly bullish now. It has been a massive underperformer but they have a new interim CEO. It is not at a compelling valuation.

He'd choose this one for upside torque, if you think that nat gas prices are going straight up from here. But doesn't pay a dividend. Not as safe as TOU.

"Undergoing strategic review" which is code for they're trying to sell themselves, and this is taking longer than thought. Share price performance weak relative to peers. His firm butted heads with management earlier this year.

For something with higher torque to natural gas prices.

One of the worst energy names. The CEO and board did one of the word acquisitions in history. When the market wanted natural gas, they added liquids exposure. Are the worst-performing nat gas stock in North America. No upside. An activist has put members on the board.

The price of oil always gets pulled around. He likes the natural gas side a bit more -- it's been through a bear market for years and now coming out of that. Over time, increased ability to get nat gas offshore and the world needs it.

But if you go 100% natural gas it's more risky. So, be more diversified but with a tilt to gas. He likes names that are cheaper than they ought to be. For him that's ARX or, for more torque, AAV.

Contains some natural gas, which tends to be weaker at this time. He'd wait till March on seasonality alone. Looking at the technicals it's moving around a lot, being driven by news. That makes the technicals challenging. Not a large-cap. Trending down, might base out.

He's angry with their recent oily acquisition, just as people are warming up to natural gas. He sold. Can't agree with the company's strategy.

Likes it. CEO is committed and knowledgeable. Many decades of inventory. Good optionality to his bullish view on nat gas to 2025 and beyond. Key beneficiary of LNG Canada. Technically a 12% free cashflow yield, but really closer to 20%. Good upside, roughly $16 target, about 40% upside.

Would consider selling stock given strength. Doesn't think Entropy is a strong business model (baked into energy price). Stock is expensive without Entropy value. Better names in sector. 

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Not overly expensive with a market cap approaching $1B. Momentum is good. Growth is looking good this year and the sector is recovering. Would let this run for now. Unlock Premium - Try 5i Free