Canadian Natural Rsrcs (CNQ.TO)

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.

Very high on his Buy List of potential names he would add. (The other being possibly Tourmaline (TOU-T). He is not touching energy stocks right now, because he doesn’t know what the price of oil is going to be. There is another potential down leg. This one is extremely well-managed.

(A Top Pick May 1/14. Down 8.14%.) Sold all of his energy between July/14 and the end of September. Great company, but this is a tough sector to be focused on right now.

Seasonality is from around the end of January right through until usually May of each year. This year it started off very nicely and has had a breakout in the last few days. Above its 20 day moving average and outperforming the TSE Composite. It looks very good, probably until around the end of May of this year.

(Top Pick Jun 25/14, Down 17.49%) First company to complete an oil sands mine, putting it in operation on time and on budget. A very well run company.

Sold his holdings last fall. He doesn’t think this is a buy until it is $33. Feels that all the Canadian, senior oily companies are overly expensive at the present time, and need to pull back a good 10% before they are in Buy territory.

His target on this is $39, which would give you a return of about 3.3%. Going into energy companies, he would be looking at ones with higher yields and more on the oil side. Yield of 2.3%.

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.