Canadian Natural Rsrcs (CNQ.TO)

His favourite. Superbly run.

For the 1^st time in decades, the US is in a net energy surplus, they are producing more energy than they are using. He doesn’t believe this is a game changer for the oil sands. This oil will get produced and will find its way to market. Whether that market is in Asia or the US, he doesn’t know. Every year this company gets more efficient in their production, and as they ramp and scale up, the cost per barrel of the refining process goes down and down. Because they are on an inexhaustible reserve with no exploration costs, they have a real advantage over traditional production/exploration companies. He is a believer in this.

Thinks the market is really ignoring that this company gets a lot of their effective pricing from Western Canada Select, which really hasn’t changed much. Differentials have narrowed, so the “spread under” has gone up. Thinks that on this next quarter, as long as oil doesn’t drop another $10, this should be a nice little earnings release. Ultimately they expect to have $5.5-$6.5 billion of free cash flow by 2018.

This, along with Suncor (SU-T) are probably the 2 premier energy stocks. Has done well this year, but has been peaking out in the last year. The cyclicality is such that this is the right time of the year.

(Market Call Minute) It’s a good story, but is heavy oil and he wanted to take his energy weighting down. Hold at best, but more likely a sell.

Cheap and generates cash flow. Pays a nice dividend. If this is in your TFSA and you are looking out a few years, this is a fine place to be. Smart management.

A very dominant producer in the western Canada space. International operations in the North Sea and West Africa. Extremely well managed. Have grown very well through solid management and corporate acquisitions. Very low cost production at $50 a barrel. Enormous stream of future expected cash flow. $5.5 billion to $6.5 billion. Dividend yield of 1.95%, which should grow by 10% a year over the next few years.

Their cost of production is about $50 vs. new companies at $75. There is a head and shoulders development on the stock chart. If we take out the lows over the last month that could trigger another round of technical selling. Our next best buying opportunity would be about 5% lower.

A really great, great profile and pretty cheap on price to cash flow if you are willing to look 1-2 years out. A premier play in Canada with massive production. Also, benefits from a tightening differential between the Canadian oil price and West Texas. Likes this one a lot. A great stock to own.

(A Top Pick Aug 26/13. Up 51.67%.) Spent a good part of 2013 in the penalty box. A very, very well-managed company. Diversified across natural gas, heavy oil and light oil. Growing dividend and growing production. This is still a Buy at current levels.

(Market Call Minute) It is on her watch list.

It is pretty viable right down to the $50 range for oil. It is a legacy producer. It is pretty sustainable at that rate. It is a bench mark name that people follow widely. It is a proxy for oil to many people. He would not sell at this point. Doesn’t see much down side at this point.

Sold his holdings recently. Had a great run from the low $30’s. Heavy oil spreads have tightened, which has benefited them. Valuations in the sector have gone higher. He would look to buy this back again in the low $40’s. Still a good, long term growth story.

The energy sector, particularly the energy exploration and production industry, tends to have 2 periods of seasonal strength. The first one is from January all the way through to May. The next period is just approaching, basically the last half of summer all the way through to Labour Day. The average gain for August and mid-September is about 5%. Trends are still very much positive. 1.9% dividend yield.

One of his favourite stocks. He is kicking himself for not having bought in. In the next 12-18 months with a pipeline expansion, you are talking about a million more barrels of throughput.