Canadian Natural Rsrcs (CNQ.TO)

A nice little base building going on, just about to break out. Earnings and cash flow will be terrible in this report, but once you get past that, look for the stock to perform very well. Buy into any strength over the next week or two.

Over the years, this has been a stock that he has never been able to afford, because on a multiple level it just looked so expensive relative to the others. It has now come off with the group and provides an opportunity. You want to buy the healthy and the strong companies that are able to take advantage of some of the weaker companies that may get into trouble. This is an enviable company from its management and its properties. Yield of 2.8%.

Suncor (SU-T) or Canadian Natural Resources (CNQ-T)? Although he likes Suncor, this would be his choice. Keystone is probably going to go ahead, which will help this company. When natural gas recovers, and he thinks it will, this company has enormous exposure.

There is a certain amount of leverage that you have to pay attention to that comes from oil prices. The three-year chart shows a cup formation followed by a breakout this year. It reached a peak and then broke down through the last low. From a pure technical analysis point of view, this stock is now in a bear trend. Until it reverses, the potential target is around $28. He would not want to own this until it stops falling, bases, and then moves up.

An oil sands company does not have the exploration risks that conventional explorer producers have. One of the advantages that the big oil sands companies have is that a lot of their CapX has gone into their plant. For the maturer ones, like this and Suncor (SU-T), that money has already been spent, so you don’t have to replace every well after you have completed it. This makes it easier to turn the tap on and off in terms of production, because that is mostly labour. He likes the very deep resource pool and that they are becoming more efficient producers. Thinks their breakeven point is in the $50 barrel range. He feels that oil will probably stabilize in the $60s.

There has not been a lot of money made on this name in the last 18 years. You have to be really careful with this. He is not interested in owning anything in the space at this time.

Canadian Natural Resources (CNQ-T) or Suncor (SU-T)? Likes them both, but his preference would be Suncor. Both companies are solid and have low cost of production. A 2.7% dividend yield.

Great company. Have done a really good job. He is particularly impressed that now they have a lot of their assets in place, they are raising their dividend. He can see future dividend growth over this.

Canadian Natural Resources (CNQ-T) or Suncor (SU-T)? If you look at their cash flows, both companies are going to be fine at $70 oil. Slashed their growth budgets, but they will make it. He likes both of them.

Excellent at how the management has consistently delivered on what they are trying to do. They brought an oil sands mine on stream on time and on budget. Very few can do this. Still produce a tremendous amount of free cash flow. Amazingly diverse group of assets. It is compelling. Over time it should re-rate itself.

Great management and incredibly well run. A fantastic company. Dropped to the lows of October so he would look to buy more at these levels. At some point oil will stabilize and then go up.

What is really important to look at in oil companies is Cost per Barrel. (He had this information in a Globe column 2 weeks ago.) This is the key number. With oil at around $74-$75, this is a time you have to be picking away at these types of things. On the other hand, maybe you should wait a month or so when oil moves up from $74, and then start picking away. There is some value here right now.

2.17% dividend. He sold BCE-T to buy this position. This is a great opportunity to own some really cheap assets. Oil prices are stable out West relative to WTI.

Amongst the senior producers, this is the one that she likes the best. She wants to see some stability in the crude oil price. Once we get there, this is definitely a name that she might be adding to portfolios.

You have to be very disciplined on the producers. Buy them low and Sell them high and you shouldn't be greedy. You are never going to get it right at the bottom, but he thinks it is not in a bad range now so try to get it around $40 or below, which is a pretty good Buy on this company. Extremely well-run.