Bonavista Energy Corp (BNP.TO)

Hasn’t taken a close look at this one recently. One of the things he watches for when a sector has been doing very well is for those companies that start to under-perform early. Earlier this summer, natural gas stocks were having a very good run, but this companies share price started to back off. They have under-performed coming into and during this rally, and are now under-performing and starting to selloff early.

Bought last week. An interesting Nat Gas levered company with a dividend. Growth and dividend. It is a buying opportunity. They just did a financing.

Thinks there is potential for the company, but you have to keep an eye on it as well. Stock hasn’t been the best performer, and a lot of that relates to some of the capital efficiencies and their ability to get a lot of production for their dollar. Cost structure is a little bit higher than some of the others. If we see strength in gas prices, everything will be fine, but if we go through a prolonged period of lower gas prices, that dividend would be at risk. (See Top Picks.)

If this is gas related, it is probably okay. It will at least run back up to the old highs, and maybe higher. He is kind of dubious about anything that is oil related. We’ll probably get a rally in here, but he thinks the lower fruit has been picked in the energy sector. The chart looks like a long A B C. He would be careful of this At $14, he would start reducing.

Energy is entering its next period of seasonal strength. There is potential for downside risk, and this stock is showing that with its recent plunge. This has fallen below its 200 day moving average and its 50 day is pointing lower, which implies a negative intermediate term trend. Support has been breached on the stock, so it is pointing to significant downside potential.

(Market Call Minute.) Would hold off on this. They have limited exposure to any upside in natural gas. Have been doing a good job of turning things around, but there are other names he likes better.

This strong trend developing last year broke and we are getting lower lows and lower highs now. This is not good. We are in correction mode. There was support in the $14 area, so 2-3% lower he sees support coming in and that is where to nibble.

Short term chart shows a long uptrend from November through to March followed by a broken neckline, and then a drop to the current price.. He sees a support at around $13.50, which you want to see it bounce off of. You only want to buy when it moves up.

Very well-managed company. A stock that he tends not to have to worry about regarding dividend risks, etc. One of the low-cost operators in the basin. Dividend is secure. This is a name that you can sleep at night without worrying about. At this price, there is a pretty convincing argument that you might want to buy more.

More gas weighted than oil weighted. The knock on the stock was that their debt was getting up. Had some management changes at the top, and people were not showing it any love. Have a fair amount of gas production hedged, so if gas doesn’t work out, they are going to be well protected. Have made their operations much more efficient. Feels the valuation is definitely among the lower end of similar sized yielding trusts.

Well run company with good exposure to gas (two-thirds) and it is hedged. Are employing new completion technologies.

Doesn’t own, but he is calling for a rally in Nat Gas. These guys hedged a huge amount of production so you won’t get the sensitivity to gas prices.

Sold her holdings after they said they would not cut the dividend, but did. Has had a nice little run because we had a really cold winter and natural gas prices had improved and inventory levels are very low. Unless we see natural gas prices go back up to the $5-$6 level, she does not see them raising the dividend. Feels the current dividend is very safe. She prefers ARC Resources (ARX-T) which is a very high quality producer and Crescent Point (CPG-T).

Has done very well since last fall. He would be cautious about chasing this. His target is $19.50 over the next year. Management has done a very good job in concentrating on key core plays. The price of natural gas has helped somewhat.

Struggled over the last couple of years with low gas prices. They own a lot of their infrastructure and have a commanding presence in plays that have great economics. Thinks they are through the worst of it.