Cenovus Energy (CVE.TO)

He is negative on the commodity space generally and has not participated in the rise in oil and gas prices. He doesn’t see the rise as based on fundamentals and sees high geopolitical risk. Strongly prefers US Oil and Gas companies over Canadian ones at this time.

Has looked through all the energy companies on both sides of the border to see if he could find some value. He didn't find much, which is peculiar, because he had expected he would find more stuff in the US. However, they are just as reluctant to raise earnings forecasts (his FMV) as are Canadian analysts. This one is cheap, and selling at a 36% discount to its BV. It’s 1.53% dividend is covered. It needs some earnings in order to turn and give it some earnings momentum, then he thinks the stock would go pretty quickly to $17. However, it does need that momentum.

They got into trouble last year. They paid a lot of money for an acquisition. They have since sold a lot of assets and de-levered. 7% cash flow yield vs. 4% for the group. They will have torque to an energy cycle that he feels in its early stages. (Analysts’ target: $15.00).

She is very low on energy weighted stocks. It’s not conducive for strength in cash flow and pricing in the US producers. The large cap ones, including this one, have done relatively better than smaller oil producers.

An integrated oil company. They bought out a partner in their oil sands deal. Took on a lot of debt, but did an equity issue, which didn't go very well. Lost their CEO but there is a new one in. They have to bring down their cost structure and thinks that is going to happen. They'll sell off some assets in the next little while and bring down their debt. Trading at 4.7X cash flow. Dividend yield of 1.7%. (Analysts' price target is $15.)

When they made their big acquisition he wondered what they were doing. They destroyed their balance sheet. It’s becoming a show me stock. There are better quality names to choose from.

He would not have predicted that the differential would blow out. Most of the damage in the stock is temporary because of the differential. He can see costs coming down in 2-3 years time. Dividend yield of 1.8%. (Analysts price target is $16.)

He wishes he was as positive on the long term prospects as with TOU-T. They sold some assets but he would stay on the sidelines with CVE-T.

They are in the process of selling assets. It is down for the year and bounced on results plus a new CEO coming on. It is definitely a tax loss candidate. He would be careful here. For the long term, they have a strong platform, however.

He would be inclined to take a little profit. This company rolled the dice, and it looks like it is going to pay off for them. They still have some issues in that they have to sell off some assets, and there is a chance that the pop we are seeing in the oil price may not necessarily last. He would be inclined to take a little profit.

A restructuring story, so will take some time. Has a new CEO coming in and will be cutting costs. Still has very good production. Expects the company to tick along. (Analysts' price target is $14.50.)

Had a tough year and their share price tanked. It’s starting to see a bit of a turnaround, and there has been some nice appreciation over the last couple of months. Pulled back in the last few weeks with the sector. They started to eliminate debt, which is a huge thing for them, because their debt ratios were off the charts. Have had some strategic asset sales which is bringing down the debt, and the market is liking that.

Likes the ConocoPhillips deal. It appears the market might be coming around on this finally. If you take the negative view, it is like they purchased more oil sands assets and deep basin, where they don’t really have expertise, and now they are going to have to sell assets into a bad market. However, those assets they are selling cash flow even at $45, and there is lots of money out there looking for those types of assets. Dividend yield of 1.6%. (Analysts’ price target is $13.50.)

Not one of his favourite energy stocks. Made one really bad acquisition at the wrong time and piled themselves up with debt. The CEO announced he is leaving, but in the meantime is trying to undo some of the mess. He would rather go for a well-managed company with good assets and that will be growing.

There was the crash in oil prices, and this company didn’t restructure as fast as everybody else, and got really hurt. Recently did a very big acquisition and had to issue a bunch of shares, and the stock has fallen even more. This is probably the time to own the stock because of new management coming in, who will probably exit some businesses allowing them to pay down some debt. Dividend yield of 1.6%. (Analysts’ price target is $13.)