John O'Connell, CFACrescent Point Energy CorpCPG.TOCOMMENTSep 16, 2014

Great company. Looking at the chart, big wall of resistance it just couldn't get through. Then it broke out. If you own it, hold. If it pulls back to the neckline, he'd be all over it.

The CPG today is not the CPG of old. It used to have a lot of low-grade wells and bought a lot of companies. Now, they have a serious drilling inventory in the Montney and Duvernay, economic ones in the latter. The board is now conservative and respected. they have more than enough . He projects 3.5x free cash flow inventory, 60% returns to shareholders and the rest to the bank to pay off purchases. In a year or so, that ratio should be 80/20. Meanwhile, are buying back shares and continue drilling profitable wells. He targets around $20. It ticks all the boxes.

Very misunderstood and still perceived as management drilling 100 barrel per day wells in SE Saskatchewan. Rather, a lot has changed, repositioned into the Duvernay and Montney regions with two decades of high-quality inventory now, drilling some of the best wells ever. They will return 60% of their free cash flow to investors and are actively buying back shares. Are paying down debt more next year. He targets $19.28. Lots of upside.

He sold it recently to buy Meg Energy, which holds more opportunity given its new pipeline. No reason to sell CPG unless you switch to something else. His outlook for Canadian energy is bullish (when new pipelines are completed).

Names to look at in the oil space, offering more torque or upside to the price of oil.

Support around $8.50-9, bouncing off. Resistance around $11, seems to be heading that way. Once it hits $11, we'll have to see. Chart shows a good trade for now.

Its base is $8, but he expects it break out above $11 to $12.00-12.50. There's an uptrend that suggest a longer-term buy. He expects higher energy prices and more M&A activity in energy.

Recent M&A not being rewarded by market. Investors would rather return of capital, rather than buying new assets. Out of favor stock. OVerall, demand for energy rising. Strong business with good management team. Current share price very cheap. Good for long term investors who are patient. Generating strong cash flow, with ability to pay down debt. 

Overall - energy stocks attractive. M&A not being favored by the markets. Advise investors to wait 3-4 years before proving out recent acquisitions. Company cheap on an objective stance. Does not own shares. 

Volatile sector. Energy is #18 of 18 short term, #8 long term. Lots of undervaluation in the sector. Decent dividend. Stable chart. Plays into the slower-paced move to sustainable energy, creating a bid under the energy sector.

Their recent acquisition could be synergistic. Is bullish energy, but CPG isn't on his radar. Can't find a reason to buy it.

It has had a recent drop with the acquisition. The basing pattern interests him especially if the dividend holds, but he prefers Pembina Pipelines and others in this space,.

Hammerhead was a good deal, horrific timing with oil falling overnight. Deal is 11% accretive on free cashflow per share, extended premium inventory life from 15 years to 20. He sees 75% potential upside at $80 oil. Yield is 4.21%.

He's pro-M&A, if it allows a company to pay shareholders more. CEO promised him last week that the company "is done" with M&A. 

Never a good sign when your stock issue gets hung up. Timing wasn't ideal, with weaker sentiment on oil below $80. New concerns about acquisition binges. Special dividend was a "teaser". On the sidelines, due to short-term indigestion on the acquisition. May need dispositions to bring debt back down.