Canadian Natural Rsrcs (CNQ.TO)

It is hard to find value, but in the energy area amongst the seniors, if you have a 5-year time horizon, you are going to make good money. This is one that gives you that opportunity. Dividend yield of 2.8%. (Analysts’ price target is $52.50.)

Next year the horizon project will be completed and there will be no more capital cost. It started back in 1999. They have delivered exactly on plan. The balance sheet is in pretty decent shape. But the stock has run up a bit, so it is a hold.

He is pretty light on energy at this time. There is a lot of proof showing energy prices are going to remain low and steady. If he were going to have some weighting in energy, this is a great name to own. The technology for shales in the US will continue to put pressure on energy prices going forward. He would probably stick with some of the pipelines or some of the larger cap names such as this.

Had been Short this until they did their most recent acquisition. There are better names to have in energy exposure. If you are going to own this, you had better be right about oil prices. Good assets and a lot of debt.

Buying a lot more oil sand assets from Shell for $13 billion, and they know the stuff. They built up a lot of projects from the last cycle and cash flow is starting to come this year and next. Dividend yield of 2.4%. (Analysts’ price target is $53.)

It has become an interesting stock because they are making a very well timed purchase of shells oil sands assets to become the biggest oil company in Canada. It probably makes it attractive. But in the near term he sees oil going down so there is no reason to put new money into oil stocks.

Just acquired working interest in the Athabascan Oil Sands. Once again we are seeing foreign companies exiting the Canadian oil patch, which seems to happen every couple of decades or so. Every time they do so, it tends to be a good time to get in. On a running cash flow basis, it is basically a cash flow machine, using the money to buy more properties, grow more or return it to shareholders in the form of dividends and share buybacks.

Has a Short on this and has been Short for quite a long time. The stock jumped on the acquisition of some oil sands property last week. Everybody was excited about it. He would suggest that if crude prices do go higher, it is going to look like a great acquisition. However, if crude prices are stagnant or lower, it would look like a very, very large acquisition at a very inopportune time. He is happy to keep his Short on for the time being.

He likes this. If you look at the Canadian large cap space, this is a super E&P company, but a very strong name. The biggest catalyst for oil/gas investors is the commodity itself, but he doesn’t see a tremendous upside in the commodity.

Just came out with a very good report. This is the biggest Canadian producer. He is moderately bullish on oil prices, and feels that a move into the $60 range is probably likely. This is a good quality company. There is the worry about the US cross-border tax, which would be a big negative.

A lot of the large Canadian oil producers have gone on sale recently. There are 2 big concerns in the market. One is the possible border adjustment tax, which would raise the price of retail gasoline in the US, and he doesn’t think that is likely to pass. The 2^nd is how much production comes on in the US and what happens with the OPEC deal. The WTI strip has hung in their pretty solidly, even with some big inventory builds over the last couple of weeks. The stock is cheap. Dividend yield of 2.52%. (Analysts’ price target is $49.74.)

It is similar to SU-T, being a big cap, and it is important to own big caps in this industry. They will do well whether oil goes up or drifts lower from here.

Peyto Exploration (PEY-T) or Canadian Natural Resources (CNQ-T)? Two different companies. Apples to oranges. He wouldn’t own either. This has great stewards of capital. A big company and doesn’t know why you would want to own a large cap Canadian stock. He can buy a company that can grow production by 10%-15%, spending 1X cash flow with a good balance sheet that has well over 10 years of inventory. Prefers others.

If oil can creep up to the mid-$60s, CNQ-T should go up another $5-10. It is how well they execute on the oil sands side. 2.5% yield. This time last year they were building their business. Now they are waiting for everyone else to develop their technology and then drill up everything and make tones of money. (Analysts’ Target: $49.78).

Have done exceedingly well. Book value is $24.05. It got down to below book value last year. They were impacted by the problems in Fort McMurray. Volumes will be coming back from their oil sands business. This stock is impacted when the market gets nervous about the price of oil. They need to start generating the free cash flow they are talking about and to pay down debt. He thinks they will go to the acquisitions trail again in the future.