Crescent Point Energy Corp (CPG.TO)

This is probably way too cheap. Trading at around 5.8X. Doing a good job of selling their non-core assets. One of the prominent light oil producers in Canada. They've had really strong production growth over the years. However, he models very low growth over the next couple of years. Has 126% payout ratio, so the dividend is not safe. Trading at 3X 2018 and 2019, which has him not being a buyer.

Has had a bit of a pop recently, but that directly correlates with oil prices. Oil is not in a rush to get to $70-$80 anytime soon. Based on that, he would be selling this and moving on.

One thing this company has going for it is that it had a low in the summer at around $8, which gives it a floor. You want to see this just below the $12.50 range, which is where you are going to find resistance. In place of this, you could look at a basket of stocks through the XEG-T. If expecting this to play catch-up, the odds are pretty high that it is going to stay a laggard. You don't want to be with the laggards.

One of the larger E&P companies in the sector. He has not been that keen on the sector as of late. The problem is a lack of pipeline capacity to get the product out. Western Canadian Crude is trading at a decent discount. Profitability is not where he would like to see it with most of these Canadian companies. You want to go best of breed. You want to own downstream assets. He prefers SU-T because of great upstream assets as well as refineries and service stations.

This has quality assets. Their problem has been management and their messaging to the capital markets. They lost a lot of trust when they did the equity issue last fall. At current levels, it is tremendously cheap relative to its peers and historical prices. Yields over 3%.

Had owned this, but sold it at around $17 earlier this year. He was concerned about oil prices. Investors are really being careful about having good balance sheet companies. If you have some optimism on oil prices as he does, he would probably hold onto this. It has been a little unpopular with institutional investors because of all their acquisitions. There are better stocks around if you want to buy one. Dividend yield of about 4%.

It has a book value of $17 and is trading at half that. The numbers are compelling but there is a credibility issue with management that has to be rebuilt. He would hold. The balance sheet is in good shape. You could buy when there is tax loss selling between week 2 in November to week 2 in December.

There’s too much history amongst retail and institutional investors to want to embrace this name for the foreseeable future. Some people may have an issue with overall executive compensation relative to shareholder performance over the past 5 years.

It is unlikely it will double in the next few months, even if oil went to $60-70 or even $100. They need a higher oil price for the stock to move. It is a torquey play on oil.

Owns a very small position. He is not buying more, which has less to do with fundamentals of the business and more to do with sentiment on energy and on the company. Historically, the street had rewarded them for making acquisitions, but more recently they have not rewarded them. Now the company has to batten down the hatches and focus on operational performance, generating cash flow and paying down debt. This trades at a low multiple and pays a nice dividend. As a long-term play, if you think oil prices are going to be at $45-$50 or higher, it is one he would hold onto.

It has a low valuation compared to its peers. It is oily and has lots of Saskatchewan and Utah, which is good. The discount has gotten so big because it got out of favour so that if it traded with peers it would be a big boost.

VET-T vs. CPG-T. VET-T never cut their dividend with the low in oil prices. They are a diversified, very well run company. CPG-T is more of an oil play and more leveraged to the price of oil.

It has not helped him to date this year. They are doing okay. The dividend after the cut is safe. The growth side of it is challenged.

He does not own any oil companies, but if he did, it would be this one. Oil companies are price takers and cannot control the price of their product. Oil has reached a peak in demand and will decline as a source of energy as time go on. Pullouts from the oil sands told him that oil had peaked in demand. Those operators are not dummies. Oil sands is the most expensive way to get oil.

It is going to turn around at some point. There is no question. People in India are not buying electric cars and demand will continue to grow for gas. He thinks you will be okay if you shut out the noise.