Canadian Oil Sands (COS.TO)

Wouldn’t own this under any circumstances. It has 13 members on the board. The minimum payment to a board member is about $200,000. This is not a huge growth opportunity and a very expensive business to run. The balance sheet has gotten destroyed.

This stock is heavily dependent on the commodity price. He would bide his time before investing in a stock like this. A lot of the bad news is certainly reflected in the stock. Would prefer a company with a much sounder balance sheet.

Canadian oil trades for less money than Brent, West Texas, etc., because it is really, really hard to get it out of where it is to anywhere else. He does not see a big resurgence in the price of energy here. Where he thinks there is going to be a jump in this company is if they do get approval for the Keystone pipeline. His bet is that you should Wait.

Had to cut the dividend. It is high cost oil. If oil prices stay low for a couple of quarters, he would see a decline in the price of this stock.

A lot of people were putting numbers together to see what the company would be worth if it were sold. It got to the point where it was so cheap that it was actually below the replacement costs for an oil sands project with an upgrader. People were looking at this as a potential take out. There was a big Short position and a lot of Shorts had to cover their positions. They have a good asset, but it is challenged by being just oily assets. In this environment, where their operating costs are $40, it is very challenging for them to make any money. She would prefer not to own this until there were higher oil prices. Easy money has been made.

The share price on this is going to follow the price of crude energy. Drastically reduced their dividends with the collapse in crude oil prices. Wouldn’t Buy it here, but if you own you may want to hold it because crude will eventually recover.

They just cut the dividend. The 3-year chart shows the stock was moving sideways for a long time, and then broke down through its support level in the high teens. Technically, he would like to see a base and we are really early in this whole oil cycle. Be cautious on this.

He is not a fan. He used to hold it, but they seemed to be into a type of operation that is going out of style. He prefers pumping steam down to get your heavy oil up. His capital requirements raises questions about ongoing cash flow and maintaining a reasonable dividend. The oil sands in general are a little on the edge in terms of cost containment. He steers away from totally oil sands focused opportunities.

They have peeled back their dividend. If he were to play the oil sands, he would rather do it through a more integrated fashion, such as a Suncor (SU-T) or Cenovus (CVE-T). If these prices remain depressed, we don’t know how long it might be until we actually see capital investment picking up again, or being able to justify the costs of building these oil sands producers.

This is an oil bond. There is no growth. It is a consortium of 5 players and none of them can agree on what to do next.

All oil stocks will go up at the same time unless there is something specific about a company. This is one that you would expect to attract a little bit of attention because it is such a big name. If you start to see this pickup again and the oil sector starts to increase and you see momentum coming back to the sector, he could see a bounce that could happen here.

There has been a massive short covering in the last several days. Has been selling into this recent bounce, as he doesn’t feel it is necessarily sustainable. It could still be retesting these bottoms.

It is a technical rally, a bounce off the lows. A bear market has short, sharp rallies. They are a drop in the bucket. COS-T is not the best in the sector, and he would prefer the best, which this isn’t, when one feels it has bottomed. A bounce into the new year would be more of a trade.

There are hundreds of stocks in the US and hundreds in Canada that are much more attractive. This has been an ongoing, very capital intensive enterprise where every year feels like it is going to be its year. Has been a real frustrating name to own. He would not be interested.

They rank as having the most debt. This is risky. He prefers strong balance sheet companies that have also been hit hard.