Baytex Energy Corp (BTE.TO)

(Top Pick Jun 15/12, Down 2.75%) Kept this one and it has a good yield. Continue to build production.

Baytex Energy past two quarters have been weak. It is focused on heavy oils and differentials. She owns it and has bought some recently. It could still have a downside but thinks they will be okay.

Heavy oil. Missed on quarter so you see the drop a little worse than the group. Differentials have widened a little in the last few weeks between light and heavy. Payout ratio of over 100%.

Very high quality name. Still under pressure from oil differentials but is of the opinion that although. they will continue to be volatile in the near-term, they’ll gradually come in to normalized levels of 18%-22%. Have their own trucking operations and hedge a fair amount of their production, either through physical hedges or through real capacity. Expected long-term annual growth of 8%. Yield of 6.51%.

(A Top Pick April 27/12. Down 15.95%.) Sold his holdings about 2 or 3 months ago because he has some concerns with Canadian oil that is tied to the US and we don’t have the pipelines to ship it. His company has it as an “outperform” with a $53 target on it.

Very well run company. If oil prices stay up where they are, he thinks the 6.7% dividend is sustainable. As a heavy oil company they have been suffering from some of the spreads on the heavy and light oil differential. Well-run but they are at the mercy of the underlying commodity.

(A Top Pick Jan 29/13. Down 15.64%.) Great Buy at current levels. Cash flow is unchanged from his previous forecasts. Very strong balance sheet and good production growth over the next 4-5 years. Yield of 6.86%. Thinks it will yield healthy double-digit returns.

Sold his holdings. Thinks the WCS spread is going to continue to widen so he would be sitting on the sidelines. This is one you want to pick up after you see a rebound in global growth.

Doesn’t know exactly why it has broken down through the $40 level. Expects people may have got concerned that the dividend is potentially under pressure but he doesn’t see that. Heavy oil producer but has been quite successful in shipping by rail. One of the best, most efficient producers going. Will probably be adding to his positions.

Only about 30% of their production is affected by the price differential. This is one of the names that international investors like to short. Their CO play is the most economic oil play, be it light or heavy, in Canada. Hedged so he sees no reason why the dividend would be cut.

6.8% dividend is sustainable. Support at $40 which we broke and if this continues and you can get it between $36-$38 you will get a 7% yield.

The opportunity here is that the discount for heavy oil producers has narrowed their differentials yet this company hasn’t responded. Probably because of concern of longer weather in the spring break up so production may suffer for Q1. Yield of 6.33%.

Great resource play. Valuation trades fairly close to some of its US peers. Technically it is oversold and she does see a rebound in the stock. High-quality stock. 6.3% dividend yield. A good long-term hold story.

Once this sector starts to bottom these stocks will tend to do much better. CLO-T is an ETF for the energy sector. You can see we are not that far off the 2009 lows. Until the sector starts to turn, don’t get bullish.

Heavy oil and a high yielder. This one gets hit when there is a worry about heavy oil/light oil differentials. His problem is that if you put together the dividend and the CapX, it comes out to 140%. He prefers this to be not over 100%. They need to grow into what they are paying. 140% is not a number you can sustain forever. (See Top Picks.)