Crescent Point Energy Corp (CPG.TO)

If you want energy or oil exposure, this is a name that will be a primary beneficiary. When people want a play in the recovery of an oil price, they will sell the Suncors and buy this. Trading at around 6.3-6.4 times cash flow, using $55 oil. If he is wrong in his timing of an oil recovery, they have a fairly decent hedge position for 2016 and financial leverage that is well below average. Dividend yield of about 7.08%.

He likes the company. Cut their dividend down to $0.10 a share, which was the right thing to do. They were punished for this initially, but in the long run they will be rewarded because of the sustainability of the company. A great deal of their production is on very low decline long life assets through the use of water floods. Most assets are in Saskatchewan. A good place to be.

A solid, conservative producer. 6.5% dividend yield even after the dividend cut. This is a company that competes in this environment. They are well hedged through next year with over 33% of volumes hedged over $80 a barrel.

Have really done a good job playing catch-up with the market. Their balance sheet is improving. They are profitable with oil down at these levels. If you are constructive on oil, this is not the 1^st name he would be going to.

They have cut their dividend once. They need $1.9-$2 billion a year to sustain production. At current oil prices, with or hedges in place, they are at that level. Ultimately this is a capital recycling story and capital recycling stories shouldn’t have dividends at the 6.5% level. Sold his holdings midyear. (See Top Picks.)

You don’t need to own this right now. There is a mountain of shareholders underwater just waiting to get their money back. Take the loss and move on.

This has been beaten down along with all the other oil names. Generally speaking this is a positive. One of the better names in terms of growth. His biggest issue is that they tended to issue equity fairly often. They may not be doing that right now, but when times get better that could continue. That creates a big dilution.

Had been a core holding of his for quite some time and an example of where Stops worked quite nicely. It was very encouraging to see a good move on this today. Cyclicals can be a really frustrating round-trip for a lot of people, so he tends to shy away from these.

This is not something that he has owned. Thinks it is pretty fair at these valuations. Trading at about 4X cash flow. However, this is a company that has lived by acquisition, rather than through the drill bit. He prefers to own companies whose future is tied to the drill bit and what they can do in that area. Prefers Tourmaline (TOU-T) and Parex(PXT-T), which he feels are better alternatives.

$0.43 is the model price. The dividend is not sustainable. Mean losses extend out to 2 years. We had a bounce, but fundamentals are against you here. They will have to be a further cut to the distribution. He sees more downside.

(A Top Pick Aug 25/14. Down 55.6%.) One of the best managed oil/gas companies in Canada. Have built up an inventory of 7500 wells, most of which are conducive to water flood stimulation. This takes recovery rates from 15% up to 25%.

(A Top Pick Dec 5/14. Down 26.04%.) One of the oil stocks he held onto, and feels it is one of the stronger players out there. They are in Saskatchewan in the Balkans. Feels they will do all right.

(Top Pick Nov 7/14, Down 45.45%) He has owned it for a long time. He likes management a lot. It is his only producing company. They are using this downturn to dramatically grow the company by making acquisitions. He believes someone will eventually buy the company. He doesn’t want to sell it and then have someone put in a takeover bid 50% higher the next day. When it comes back it will do so quite quickly.

One of the few oil names that isn’t reflecting a much higher oil price, so he was adding to it today. This could be a $20 stock if he is right on the price of oil. Using $55, it is trading around 6.9X next year’s enterprise value to cash flow. Other names are higher. The business model is superior to a lot of those other companies. The dividend is sustainable to around $52-$53 oil, where he thinks oil is going to rally to next year.

It is neither a buy, nor a sell because he does not own energy or resource companies going forward. He does not know what the price of oil is going to be. Nothing can be trusted in this environment. Companies have no control over the price of commodities and yet pay out 100 percent of their cash flow.