Canadian Natural Rsrcs (CNQ.TO)

A name she would potentially add to her portfolios if she wanted to increase her energy exposures. There is very little visibility in the next 12 months, because everyone is questioning if oil prices are going to move up. This one has held up relatively better than most of the producers.

Recently sold this as he trimmed oil stocks. He likes the company and its management. They are buying assets at what he thinks are cheap prices from distressed sellers. Likes the way it’s managed and the exposure they have. A well-run company, but he is a little concerned about the oil patch today. Prefers PrairieSky Royalty (PSK-T) which doesn’t have any operational risks.

One of the premier oil companies in Canada. They are very astute at making acquisitions and integrating them, and have made a bunch in the last little while. Also, every time they have worked on a project through the years, they have always been on time. At this level, this should be okay.

Suncor (SU-T) or Canadian Natural Resources (CNQ-T)? Both companies, relative to the other stocks in the energy index, have performed pretty well. From this point on, he likes both, and is hard-pressed to tell you which one he would choose. Both have very good growth profiles. This one has made acquisitions recently. They are both very good on M&A on an opportunistic basis. Their balance sheets have been improving steadily. Because they have both held their ground so well, there are better opportunities in some of the intermediate space, in terms of capital gains.

He likes this a lot and admires its management. Probably the foremost producer in Canada without being integrated. A real benchmark for the energy industry. Superbly run, and has always maintained a good solid balance sheet. That allows them to take advantage when opportunities arise. Lately they’ve made some significant acquisitions, and he expects that will continue going forward.

This is a great Canadian company with fabulous properties and it is well managed. You need energy to start to do something. If you are optimistic on the energy price and have a long time horizon then this is a great stock.

They did a good job of making acquisitions. There is an overhang of 4 billion of stock to come out at some point. They can pay down debt, increase the dividend and buy back shares with it. (Analysts’ target: $48.00).

It is safe here. It does not rely on higher oil prices. Once their project is done they will have a lot more cash to throw around. The downside does not look too bad. (Analysts’ target: $48.11).

He is modelling a 69% 2017 estimated payout ratio at $53 WTI, which is probably approaching 80% right now. This company has outstanding growth. They just did an acquisition. He is modelling 20% production growth and 40% cash flow per share growth over the next couple of years. The acquisition is very accretive, but for it to work you need oil prices to cooperate. You need to have $50+ oil. He would be looking for oil companies with balance sheets closer to 1X EV to cash flow.

(Market Call Minute.) This is a hold.

They have struggled recently. They are digesting an acquisition. It is going to be a play on energy prices.

He is Short this, but it is more of a generic Short in that he needed a hedge being Long on energy. If he is wrong on energy, this company will be harmed quite a bit by a very enormous debt load.

Energy is his biggest weight in his portfolios and has been for a couple of weeks. We are at the lower end of the oil price range. CNQ-T has held up well over the last 5 years. He does not see the tail risk currently. You want to buy a quarter or a third into a position and do so on weakness.

As energy pulled off, he added to this in the last 48 hours. In a perfect world, he would have waited until it was in the low $30s. Likes the acquisition they’ve done. With the positive energy outlook, he thinks it will throw off fantastic amounts of money in a couple of year’s time. In this bad market, this is one he would add to. Dividend yield of 2.8%. (Analysts’ price target is $52.50.)

Has a BV of $25.17 at the end of Q4. They did the big Shell deal, and the stock dropped from around $44 to $39. Debt is now a $25 billion, and equity is about $30 billion, so the balance sheet is very leveraged. They are planning to sell some non-core assets. This deal is more well received than what the Cenovus was with Conoco Phillips. However, it is oil sands and a large part of their production is there. If oil prices go below $40, this stock will probably get hit, so you will have a chance to buy even cheaper. A great name to own for the next cycle, but is trading expensively.