Canadian Natural Rsrcs (CNQ.TO)

One of the best managed oil/gas companies in Canada. They have postponed some production. You would want to hold this longer-term, depending on how long your investment horizon is, and when you think the bottom can be picked.

(A Top Pick Jan 7/15. Down 11.95%.) Still likes this and has been buying it recently. One of the bellwether stocks of the industry. One of the best financed with some of the best properties. Great management. Still a Buy.

(A Top Pick June 29/15. Down 7.29%.) Covered Call. It was a very high implied volatility on the options on this. Had bought the stock at $34 and sold a $34 Call for $3, so his net cost on the stock is $31. If you have this, he would just leave it. The option is going to expire in January and he would write another 6 month option, because you are going to get another $3 in January, which will reduce your cost.

What principal metrics do you focus on when assessing a company like this? An important metric for her is free cash flow growth. Looks for companies that can grow dividends over time, and the only way you can do that is by growing your free cash flow. This one has an enormous free cash flow growth potential. Have done an excellent job with the Horizon project and the future phases that are to come on board and a stream that will add nicely to that free cash flow. Valuation makes a lot of sense right now, because they haven’t done as well as the competition.

(A Top Pick Oct 23/14. Down 16.05%.) Anything below $60 in Canada really doesn’t work except for 2 companies, Suncor (SU-T) and this one. He added more to his holdings and is now at a break even stage. If you have a higher oil price in 1-2 years time, you get great leverage. It sort of fires on all cylinders in 2018.

(A Top Pick Nov 27/14. Down 15.16%.) (November 27 was exactly the time that the Saudis announced they were going to open the spigot.) He was thrilled to see that the Canadian Natural Royalty package is now in with the PrairieSky Royalty (PSK-T) assets. This is going to be a consolidation of the 2 best royalty packages in Canada. (See Top Picks.)

(A Top Pick Oct 30/14. Down 11.57%.) You have to buy oil companies that have good balance sheets that can take advantage of the situation or able to sell off assets. This company has always had a great resource, but also low cost and good management. They will be able to take advantage of situations going on in the oil industry. One of the companies you want to own along with Suncor (SU-T).

Suncor (SU-T) or Canadian Natural Resources (CNQ-T)? These are the 2 senior Canadian producers and are both great companies. They both look like they had a small bottom and are trying to move up. They both attract international money. Either one of these will work.

(A Top Pick Sept 19/14. Down 21.37%.) Sold his holdings in October 2014. When he started to see what he thought was Saudi policy and what it meant for the oil complex, that is when he got out of almost all his oil.

Canadian National Resources (CNQ-T) or Suncor (SU-T)? These are probably the top 2 he would be going into, but separating them out he would probably be a little more inclined to go to Suncor, just on valuation and growth potential. They are both quality growth producers and you should have both of them in your portfolio.

This would be a really good asset for some company to own, especially one of the International ones. His company has this as a Sector Outperform with a $41 target. He prefers the smaller players as possible takeover targets.

(A Top Pick June 29/15. Down 3.57%.) *Covered Call* He doesn’t have a problem with this. It rolled down to $26 as a low and came back up again. This is trading on where oil is. A very volatile component in the energy sector. The option premiums are very rich, which is why he selected it. The option will likely expire in January. If you own, continue to hold.

A well run company. They are a price taker, however. He needs something to change the supply/demand equation in oil. We are now going to see vastly more oil coming out of Iran. Frackers in North Dakota are continuing to produce. The middle east thought by driving down prices they would put them out of business. Both sides of the equation are pretty scary.

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.