Bonavista Energy Corp (BNP.TO)

Likes this one long-term, but is concerned about where commodity prices are going. He has a $14 target on this. On an $80 oil environment, they seem to be able to stay put for now.

He holds management in the highest regard. The company’s strategy, which they have executed over the years, is to take dominating positions in plays, control all of the infrastructure and processing capacity, and drive costs down. It's a great strategy. The issue with this company is that debt to cash flow is about 2.6X, which is a little bit heavier than what you would like to see. Mostly gas and about 63% of their gas is hedged. Most of the incremental buying in gassy names is with the Montney players, and that is not the type of gas that they produce.

He was disgusted by unexpected dividend cuts and sold his holdings. It has had quite a correction. You have to be positive on natural gas over the next 3-5 years, which he is. Feels this company will benefit from a rising tide. He prefers ARC Resources (ARX-T). 7.8% yield.

The internal numbers are not super sexy so it trades with the market. The commodity is low. Prefers others with better operating numbers.

He still sees cash flow growth of about 11.4%, 2013-2015 with $80 oil and $3.50 gas. However, debt to cash flow does go higher at 2.2, which isn't horrible. Payout ratio goes to 134%, which is better than the group. It was cheap before at 5.1 with $96 oil, and at $80 oil it is 6.1, which is still cheap. If you are risk tolerant, you could buy this. LNG opportunities are starting to unfold.

Great team, but on his uninvestible list because of their debt.

Likes this one. It is nearing levels where he would consider giving it a serious look. One of the best managed of what used to be the old unit trusts. Primarily natural gas exposure.

Very dependent on the energy patch. Cutting their distribution seems short-term negative, but if the company is not doing well and have a lot of debt, it is really a positive thing longer-term. They have good assets. Likes this. Distribution will gradually come back prudently. Strong management team.

Jan to May of each year it has seasonal strength, but that seems to have conked out. It is in a downward trend, below its 20 day moving average and underperforming the market. Wait until Jan.

This is one that is underperforming compared to the group. If it makes a new low since last November ($12) then get out.

(Top Pick Nov 21/13, Up 3.83%) They had a bit of a round trip here. They benefited from stronger gas prices which have muted since so it came back down. Their liquids content is coming back up. Their debt is high, but they are going to sell some assets. Their dividend is safe because they hedge their assets. They have relatively low cost operations. Great management and technical teams. It is in oversold territory. Prefers others in the space at present.

This is a good one because it has gotten weaker. A natural gas company. Does not like the oily names as much. Natural gas is trading below $4, inventories are low, so he thinks there is going to be an upward movement on pricing this winter. Management owns a lot of stock. Very good operator and operating below $13 of BOE. Yield of 6.56%.

(Market Call Minute.) Probably not a bad place to be. Good job and a decent balance sheet.

Trades at a discount to its peers, yet it has had some pretty good cash flow growth. Has a more focused asset concentration than it had as well as lower operating costs. Sees the payout ratio coming down. He models 122% for 2015, which is better than it was. Challenge here is lower natural gas prices.

(Top Pick Sep 16/13, Up 7.90%) Still likes it very much. They did everything he thought they would do. It is at a very good level to be adding to it again. He re-recommends it. He thinks the price of oil and the US dollar will both stabilize over the 4^th quarter.