Crescent Point Energy Corp (CPG.TO)

The issue here is that it is now an $18 billion company, but the stock price hasn’t moved. They issue capital basically to keep the dividend out. They do acquisitions. Now in the US because they have probably dried up all the capital in Canada for a company of this size. His model price is $38.33, a 10% discount. If you are looking for appreciation, you are not going to get it here.

They have done a great job of executing. They have sold so much equity and it is owned by so many retail investors and portfolio managers that they need to go and find some new investors. They also need to say to Canadian dealers who have made a killing selling new issues for them, “We’re going to the US and hire Merrill Lynch and find some new investors.”. These deals are just too big. Company has done a great job of executing, but it is strictly a case of flow of funds, too many shares in too few accounts.

Just acquired Lightstream Resources and issued shares for $750 million. This will be about 3% accretive to cash flow per share. This is contiguous land and makes a lot of sense. He bought more shares when it pulled back from $42. 7% yield. Cheap valuation. Thinks this will be fine going forward.

They had a great year. They have had success with their completion process. Water flood techniques are being put into a fuller scale. The recent acquisition will be very accretive.

Just did a big equity issue, and is under water from that. This is a good Buying opportunity. Pays a nice dividend. Executing really, really well. Great positions in the Bakken and Three Forks. This year we are going to start to see some really interesting results coming out of Utah.

(Market Call Minute.) This is at risk to the energy prices, but they have a shareholder base who bought this for the distributions and dividends. This will pay you along the way so if you want energy exposure, this is a good one to own. Good defensive play.

Their acquisitions have generated criticism in the last couple of years. Stopped doing that for a while and focused on internal development. Have just acquired a land package which is expanding their holdings in their core area. This is positive. Has pulled back a little so it is an attractive time to Buy or to build a position. Very nice yield of over 6% which she feels can be fully supported.

Acquired an asset of Lightstream Resources. They issued lots of shares to grow the company in the past and held back over the last couple of years and that has helped the share price. Now they are doing it again and the question is if this will hurt shareholders. He does not mind this latest deal.

6.41% sustainable dividend yield. Payout ratio of 140% which is expected to drop to 105% next year, so he feels the dividend is safe. Growth is through acquisitions, but just as importantly, they grow through increasing production. They buy a lot of raw land and explore it.

They do a lot of deals and this is probably a good entry point because they probably won’t do another deal for 6 months. The dividend is safe.

Down about 3% today on news of their Whitestream acquisition. Have a dominant position in the Saskatchewan oil patch. Basically have long life reserves which they can exploit with enhanced oil recovery methods. They continue to solidify their position. It always trades at a high valuation in the light oil space and they continue to do a lot of acquisitions diluting themselves and probably over distributing on dividends. However, it has very good asset qualities. If you are a dividend oriented investor, you can probably hold on to it, or even buy some on the current dip.

Looks a little bit top heavy. Chart shows a head and shoulders formation. Downside is rather limited at about $42. Looks like it is in the lower end of the range in a channel. To him, the risk/reward would be pretty good. Likes the space. Decent yield of 6.2%.

(A Top Pick Aug 27/13. Up 24.72%.) 6.2% dividend yield. Have continuously bought land, which is highly prospective. Essentially, the recovery rate for the Bakken type wells that they drill is 15%-20%. 20%-30% for a normal conventional well. There are 750 wells that they think they can use their water flood and production liner techniques to enhance the recovery and get it up to 20%, maybe higher. They have an inventory of 7650 wells going forward, to which they can apply these techniques. $53 would be a reasonable estimate. Yield of 6.17%.

Tends to be an oily stock rather than gassy stock. CPG is having a tough time as is oil. It broke through a support level and has established a downtrend. All three of his technicals are negative for this stock. There are better opportunities available elsewhere.

Very high quality management team. Just one of those companies that gets it done over and over. Has decent per-share growth of 7%-8% expectancies for this year. You’re paying top dollar for it, but you are getting a high-quality company as well.