Canadian Natural Rsrcs (CNQ.TO)

This has been the one sector that hasn't really exploded in any way on the TSX, and we are currently dealing with the top level of its history. It’s a stock you would have to watch. It needs to get up through the $46 level and has had all kinds of problems doing it through the years. He would Sell at this level.

Canada’s energy sector is going to underperform the US. Most of what they do is oil and gas extraction: heavy oil from the oil sands. He is surprised valuation is holding up this much. He sees more downside risk than upside potential. You might be a dip buyer but it is not attractive at this point.

It has held up well. It is one of the trophy names out there. More than a million barrels a day. $7.9 and 8.3 $billion in cap-X programs. They are the biggest player out there. The stock is trading above book value and you want to buy it when it gets down there. It could get pulled back in Q1. He thinks we will see a recovery from tax loss selling and then a second low. Any new bull market in energy could go into 2022/3 after the lows early next year.

Canadian Natural Resources (CNQ-T) or Suncor (SU-T) for a longer outlook for gains? They are almost interchangeable. They are the 2 quality companies in the Canadian oil patch, and the 2 that have been able to purchase assets at good prices, while other companies were down. He owns both, and it is a coin toss as to which would do better in the next couple of years. He would be a buyer of both.

SU-T vs. CNQ-T. SU-T is a great company. With CNQ-T they are the two big guys in the field. He owns neither one but he would lean a little more to CNQ-T because of better valuation. The yield is not as great but they have more potential to bump the dividend up. Unit we get a better energy environment in Canada the growth will be limited.

What's a good blue-chip, dividend paying energy stock for a long term hold? He really, really likes this one, the best in class. Assuming oil ranges from $40-$60, this company is going to gush about $2.5 billion in free cash flow in 2018. They are going to pay down debt aggressively. They’ll also be increasing the dividend.

His outlook for 2018 is that oil and gas prices are going to remain range bound. Would prefer energy infrastructure instead of this company. He wants exposure to companies that are going to benefit from pulling the stuff out of the ground. That includes transporting it, fractionation for gas, logistics. Companies underpinned by “fee for service” or “take or pay” contracts have a lot more visibility and a lot less commodity price exposure. This wouldn’t be his favourite.

CNQ-T vs. SU-T. Both are up for the year because the profits are in refining. They will both generate significant cash flow. They could buy back shares or make an acquisition. Both are good for the long term but there could be weakness during tax loss selling. SU-T gives you refining stability and CNQ-T gives you oil sands growth.

The analysts and investors love this because of the size and growth. The Horizon project has done well. The stock has continued to do well, but he worries a little that Shell is going to come out on a short-term basis. He would be more inclined to take money out of this rather than buying. The valuation is a little more expensive than it is on juniors.

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.