Canadian Natural Rsrcs (CNQ.TO)

This has the best oil sands mining project. Horizon is a great project for them. They are executing this under budget, which historically has not been the case for oil sands projects. Very disciplined management in capital allocation. A good core holding. Have increased their dividends for about 15 consecutive years. Sees a lot of upside in a normalized oil price environment.

(A Top Pick July 18/14. Down 41.99%.) Reduced his holdings by half in October. This is probably one of the better companies to be able to ride out the storm. Have significantly reduced CapX by about 30%. They are trying to rein in on going just for the production development that is going to be required, and hold off on any future CapX spending. Have wonderful assets in thermal oil sands that they can just sit on and wait until there is a better opportunity. Very clean balance sheet.

(A Top Pick Sept 11/14. Down 36.62%.) Got stopped out. He still likes it as a higher quality, if not the highest quality name in Canada in the energy space. However, it looks like it will continue to be challenged by persistent weak crude prices.

This is a combination of an oily stock and a gassy stock. It tends to have a period of seasonal strength from January right through until May of each year. Right now the stock is in a downward trend and showing early signs of trying to bottom at current levels. However, we are clearly not into the period of seasonal strength. There are other gassy stocks that look a lot more interesting. (See Top Picks.)

Considers this to be one of the better run production/exploration companies in Canada. Sees them doing more and more with the turnaround at their Horizon facility. At these prices, this is going to be a very, very good buy for the long-term. Dividend yield of 3.25%.

This one comes down to your call on oil. If you think we are going to stay at $37-$38 forever, don’t own the stock and don’t buy anything else. Relative to other large caps, this wouldn’t be his top name. He would still lean towards a Cenovus (CVE-T) or Suncor (SU-T), but wouldn’t buy either because they have oil sands exposure. He also questions what the NDP government is going to come out with. They are more leveraged than most and have raw heavy oil exposure that they don’t upgrade, relative to Suncor. If you own it, crystallize a tax loss and roll it into another name that he likes better.

(A Top Pick Oct 23/14. Down 21.76%.) Had just bought a half position at that time, and has now bought the balance. If the market got another thumping, this is the one he would add to.

(Top Pick Jun 25/14, Down 35.39%) It is holding up better and better. They have been increasing the dividend. They are taking advantage of acquisitions. It will be interesting to see what they will do with their royalty packages.

This typically has a period of seasonal strength around the end of the year, December through to the end of March. After that period of seasonal strength, the stocks move lower. Wait until the next period of seasonal strength comes.

This will continue to be one of Canada’s best resources in the gas area. Its correction is just part of that reasonable state of the oil/gas companies.

Covered Call. This company is a choppier oil company in the energy sector and has very high premiums. The stock was $34 today. You write the $34 Call and you pick up over $3 for January. A seven-month return is about 8.86%, not counting dividends. If it rises, you are not going to get the upside, but you are going to get the 8.86% over 7 months. If it declines, you have production all the way down to $31 a share, and he would simply write another Call in January.

An extraordinarily well run company. When he is comfortable with the price of oil he will be back into it. Don’t buy it here.

(Market Call Minute.) He owns this in a lot of his dividend funds. A well-managed company. He likes that a 3^rd of it is gas.

Sold his holdings in the fall. Great company. A mixture of oil and gas, some Gulf of Mexico, a little bit of Africa, some Middle East, US and Canada. His problem right now is the stock price. It is barely down from where he sold his holdings, and at that time oil was $80-$85 on its way down. Oil is currently at $59 and the stock has held up quite well. If it went down $2-$3, he would probably buy it back.

This is what he would call a punt. You could put a little bit, such as 1% allocation to see if it would work. The low points in October, December, January and March flushed out a lot of the sellers and the upside target moved substantially higher. It doesn’t mean it is going to happen, but it laid the groundwork. It is going to rely much more on what is going to happen with oil. Recent earnings were really good. If it started to break above the $43 high in November he would probably add that next little chunk. The downside from here would be about 5%, so the odds are in your favour.