Canadian Oil Sands (COS.TO)

Has been a disappointing company in terms of price appreciation recently. There was a big sale of Newmont’s holdings, which depressed the price. The major CapX demands are behind them, so there will be more available for payment of dividends. Doesn’t think you will see significant capital appreciation.

Has moved up about 2% where Suncor (SU-T) has moved up about 12%. How come? This company, longer-term, is going to be a good investment, but right now, the inflationary side of developing those oil sands structures has been what has impeded in getting any progress in terms of returns. It will be a number of years before you start seeing a lot of free cash flow because CapX required is quite high for the time being. Don’t expect you will see much in the way of capital appreciation, perhaps for a couple of years. If you have a time horizon of 3-5 years, you could perhaps earn more in capital appreciation with Suncor. (See Top Picks.)

Not executing properly. Too expensive. This is a big company in an industry where there has been cost inflation. (See Top Picks.)

Feels the current dividend is sustainable but he wouldn’t expect a lot of increase. This is a call on oil sand prices. Nothing wrong with this company.

(Market Call Minute.) With oil prices north of $100, this only needs $75 oil to break even. Spinning out cash flows.

2 good things have happened. 1) Crude prices around the world have gone up and 2) differential for West Texas and Brent have dropped markedly. This is all good for this company. The bad thing that has happened is the train wreck in Québec which has put the problem of how to transport oil into question. Crew and safety requirements are going to go up. Best thing would be the approval of the Keystone pipeline.

What would it take for this stock to return some capital gains? Is the dividend sustainable in the future? There was quite an event yesterday where Newmont (NMC-T) sold its holdings of this company, which put the stock under pressure and took it down under $20, which is a very good level. As the ongoing CapX program starts to wind down in terms of its magnitude, there will be more free cash flow. The 7% dividend is very much geared to the oil price, which is currently stronger than had been anticipated, because of the Egypt situation. Feels there is potential for good dividend improvement. Has a $24 target on this stock.

(Market Call Minute.) Hold until there is some closure on pipelines out of the Athabascan area.

Thinks it's going to drift below $20 to $18.

Demand for oil sands will increase over the years. Time to start nibbling as it is at the bottom of its range. For next 3-5 years we are talking about trading ranges.

Very volatile stock and depends on what the price of energy is. Because they use gas to boil up the oil sands, if the price of gas is low and oil is high, it is a pretty good situation. That hasn’t done a great deal for the share price. Have actually raised the dividend 3 times since they cut it by 70% in 2011. Reasonable yield.

Not going to be a lot of production growth for the next couple of years. If you want capital appreciation, you are going to have to see higher crude oil prices. Had to increase their CapX plans. Nice yield, but if you want a combination of yield and capital appreciation, there are probably other names in the energy patch that you could own.

Dividend secure for the next 12 months but then who knows what will happen after that. The company underperformed last quarter and he doesn’t like the balance sheet or the management. Prefers ARX-T.

(Market Call Minute.) Doesn’t see a reason to hold this name. The engineered NAV of the company is $16.50 and doesn’t have a lot of growth. Offers a ton of operational hiccups.

Great dividend. Pretty sideways for a pretty long period of time. When you look at this trading range, you need to buy at the bottom ($19), if you are a trader and sell at $22. Otherwise don’t buy it.