Baytex Energy Corp (BTE.TO)

A well-managed company. Good assets. Doesn't think the balance sheet is in terrible condition. Have been severely affected along with a lot of other oil/gas stocks. Believes it is going to level out from here. If we have some stability in the energy market, he thinks this will come out of this downtrend and reverse itself. Wouldn't be surprised to see this appreciate fairly quickly, should conditions improve a little.

Always has his eye on this because of its size and domination in the heavy oil market. Has been punished a little more than some of the other names. He would want to see it basing from a technical standpoint before he looked at it, as well as some revision in their numbers. Probably won't see that until the CRA issue is resolved.

A well run company. He was not that keen on their recent US acquisition. Heavy crude oil prices have been quite good recently. The Canadian dollar is falling, and a lot of investors don't appreciate that the falling Canadian dollar is a very healthy offset for a lot of these Canadian oil-producing companies, because they sell in US dollars. This is one that you could own at these prices and probably do pretty well.

This company has always been kind of at the forefront. A big move for them 3-4 months ago was when they bought a portion of a company in the Eagleford shale part of Texas. The Eagleford shale is why the US is now the world's largest oil producer. The area is twice the size of the Bakken oil field. It costs $40 a barrel less to get it out of the ground because it is so close to the surface. They get more money per barrel because it is international pricing and is a lot cheaper to transport it to the Gulf. Likes this one a lot.

(A Top Pick Feb 11/14. Down 20.48%.) Had owned this for the acquisition of Aurora. Sold his holdings at around $46 and $47. This is still a good dividend payer. Likes management and the Texas assets, but he prefers Whitecap Resources (WCP-T).

Trades at a lower multiple than some of the others in the group. The beta is about 1.5 whereas peers are closer to 1. They carry a much higher debt level than peers. Prefers VET-T.

Would be seen as one of the higher quality players in the space. Oil prices have been weaker recently and there is concern about the sustainability of dividends. He believes oil prices will not go much lower here and that BTE-T has a sustainable dividend.

Baytex (BTE-T) or Crescent Point (CPG-T)? Owns both and considers both of them as core holdings. The concern on this company is that they bought into the Eagleford play in the US via the acquisition of Aurora. This is a light oil play while Baytex is traditionally known as a heavy oil player. The more he has looked at this acquisition, the more he has come around to it. Recent well results have been very positive. 30 day production rates of 800 to 1000 barrels a day, which is excellent. Feels investors have concerns about them using a little bit more debt to finance the acquisition. He thinks the company has a pretty good hedge book and he is very favourable on heavy oil pricing going forward.

This is one of the high quality names that behave very differently in these environments. Below $30, this looks very interesting from a fundamental perspective. It is highly possible that a potential dividend cut is priced into the name at these levels. His preference would be Crescent Point (CPG-T).

Participated in the trend break into October. He would have liked to see it hold its support at around $37. The fact that it is below that is a little bit troubling. Also, the other indicators are not showing any kind of strength. It is looking to test the low of $33.24, and if it breaks that, you would have to go back on a much longer time frame as to where it is going to come in. This will probably depend on the macro picture of oil supplies.

Baytex (BTE-T) or Crescent Point (CPG-T). Given his belief that oil is going to be in the "middling range", you can probably put off your decision to Buy energy stocks for a few months. There is no urgency. If you are looking at a short-term horizon, 6 months or so, this one is probably the better one, because it is the heavy oil story. If looking at the balance sheet, debt to cash flow metrics, Crescent Point does stand up better. If he had to make a call, he would say this one because it has been less disappointing.

Likes it and thinks the dividend is sustainable. Likes the management team. They get a Canadian dollar western Canadian price. The reduced differential should benefit them.

This is a good one. At this lower oil price, he still sees cash flow growth at around 18%. Dividend is still okay. Payout ratio would rise to 120%, but still pretty sustainable relative to its peers. Valuation would still be attractive at 6.8 versus the group at around 9. Cash flow would still be pretty good.

Baytex Energy (BTE-T) or Suncor (SU-T)? Certainly 2 very different names. This one gives you an 8% yield while you don’t get that at Suncor. For yield hunters, this is one that he would look at. He actually likes and owns both names, and they are both fine. You are probably getting a little bit more leverage in terms of the movement in oil price relative to the stock price with this, where Suncor might be a little bit steadier being in the oil Sands space.

For longer-term, patient people, energy stocks are interesting here. You are going to have very near-term volatility as they are all about to report. This is a good name. It is a disciplined player and not expensive.