Crescent Point Energy Corp (CPG.TO)

(Market Call Minute.) They are getting closer and closer to actually having cash flow to cover their distribution.

An oil/gas producer but the structure of the shares is very attractive for retail investors because it has a 7% yield that is virtually impenetrable. Have a lot of capital on their balance sheet so it is not a risk. Thinks the actual production profile can grow. 5%-10% over the next year.

If you look at the growth it has been phenomenal. Tarred by being a serial equity issuer. If you look at the light oil focus, it is a must own stock.

If Iran situation is settled, they could just flood the market. How would this affect this stock? Iran is not going to open up any floodgates in the next 6 months to a year, so there is nothing to worry about here. Also to operationally get things back on track, would take some time. He would worry more about production out of Iraq over the next 2-3 years, affecting the global energy market. Feels this company could actually increase their current 6.8% dividend.

Large DRIP program causes dilution, but they cancelled the premium drip program. They pay out 45% of their cash flow. It is not a big deal as long as people don’t opt out of the DRIP program. She is comfortable with them because a lot of the old trusts have a much higher all in payout ratio. They have stopped making acquisition and are now growing production organically.

Company has done a superb job with regards to their underlying assets, quality of management and their track record. However, their DRIP program is about 60%. Without this, they’re really overpaying the dividend by a mile. Have been overspending the cash flow, supported by people reinvesting their dividends. Doesn’t think this is sustainable. As long as the shareholders support them and they continue to fund good acquisitions and new oil plays, they will be okay.

Stock has underperformed for the last couple of years. Has been buying it more recently. Has underperformed because they raised a lot of equity, which the street didn’t like. When they did this, they bought properties and effectively you’ve had 25%-30% dilution of the stock but they have more than doubled their developmental properties. There is a lot of potential growth. Well managed. Great yield of 6.9%.

Doesn’t like this one. Paying out most, if not all of their cash flow. To him, this is not a sustainable business model. Feels they are keeping shareholders around by offering the high fancy yield.

With the US going to be self-sufficient in oil, how will this affect the Keystone pipeline? Growth in the oil sands has been unbelievable. This company also has assets in the US and have taken the infrastructure fate into their own hands and built 3 rail terminals. Have 2 in Canada and 1 in the US. They are railing their crude from the basin down to California.

One of the better names. You want exposure to it. Oil markets will be range bound over the next year. CPG is at a high point right now. Buy at the mid-point of the range over the past year. Buy on a pull back.

There is an increase in supply through fracing, which could create a threat. Although he welcomes this, he is a bit of a cynic as to how long that lasts. Because of a rapidly declining pressure rate you have to drill an increasing number of wells. He is still buying this one for new accounts.

(A Top Pick June 6/12. Up 9.55%.) Market was not favourable on their acquisition in Utah, but ultimately this will turn out to be good for them. Haven’t made an acquisition since then. All of their acquisitions are on strategy and are focused on oil in place fields. They just take their model and replicate it. How good an operator they are has just come to the forefront in the last couple of quarters. Operating results have been very, very good. One of the few companies that have actually met or exceeded guidance over the last 7-9 quarters and we are starting to see some results out of the water flood. Almost 7% yield.

Very good management and a well-run company. Good balance sheet. Have a structured hedging program. Have concentrated their properties and have done a good job in the technology side with their water flood. 90% light oil. Good yield.

This has been one of the stellar stories out there. They’ve grown production quite nicely and exceeded the analysts’ expectations on a regular basis. Low-cost operator in doing well, both in Canada and the US. The issue is going to be his concerns on the price of oil. High $30s makes a lot of sense. (See comments under oil.)

A name that continues to impress with really good production growth. Have been a little bit more disciplined with their spending. Had some positive water flood performance and positive performance in the organic operation. Stock doesn’t seem to get off the ground which he feels is the overhang of too much equity that was issued about a year ago. Very low debt levels. His target is $50. 6.7% yield.