Cenovus Energy (CVE.TO)

All of the major oil sands stocks have had headwinds over the last year. Keystone has been on the front page. This has been a negative year for them. Have some of the best oil/steam ratios and they are still a good go-to name. Almost 3.5%. These are the days when it represents good value.

Trading at a pretty low level. The company itself is doing completely fine, showing growth in production at a relatively low cost but right now, no one is interested. The oil differential has started to contract so their numbers are probably going to surprise people to the upside. If we could get a TransCanada announcement, it would help the psychology and that’s when the stocks would start to run.

Whether or not XL goes through, the oil sands are going to be developed and CVE is well positioned. Increased reserves significantly recently. Valuation is fair but stock could see a fair amount of upside if the energy sector recovers.

If the Keystone pipeline gets built, which company benefits the most, Canadian Natural Resources (CNQ-T) or Cenovus (CVE-T)? If the Keystone is approved, a lot of companies will benefit including these 2. His 2 favourites would be CNQ and Suncor (SU-T).

(Top Pick Jan 3/13, Down 2.27%) He is a long term investor so if he liked it two months ago, he would still be interested now. Probably the best oil sands operator. Grew dividend 10% in each of last two years.

Go to name. Some of the lowest cost in the oil sands sector. Capture better differentials. 3% dividend.

Cenovus (CVE-T) or Canadian Natural Resources (CNQ-T)? If you are a trader, probably CNQ would be the better of the 2 but if you are an investor this one is probably the best. Both are excellent names. Difference is that this one is SAGD as opposed to mining, which is CNQ. This is more of a long-term play.

His model prices $30.61, a negative 4%. If it got down to $29.57, he would be more interested. (See Top Picks.)

(Top Pick Jan 12/12, Down 0.79%) Did well compared to the rest of the group. Still likes and owns it. Low risk, high quality and thinks it will be a success story in 3-5 years. A great investment here.

Expects to see significant production increases over the next number of years. Currently producing 250,000-300,000 barrels a day and should increase up to around 500,000 over the next few years. The big thing with them is their exposure to Foster Creek and Christina Lake SAGD projects.

Good growth, a bit integrated. In the next 6 months it is a safe place to be and after that there may be stocks with a bit more upside. Thinks it is a bit undervalued. Decent dividend and production growth. It is most similar to SU-T, rather than CNQ-T.

Winner of the spin-off from EnCana. Does not have the cash flow potential of the other two. But you would not go wrong with this one.

Cenovus (CVE-T) or Husky (HSE-T)? Slightly different companies but he would favour Cenovus which has a few more catalysts than Husky. You are essentially just collecting a coupon on Husky. Would prefer buying this at around $30-$31. Integrated, so protected from the heavy oil differential.

Oil sands and in trying to have exposure to different types of oil production, this is the name he picked. Have done a great job of bringing on their production in stages. Refining capability really insulated them last year when the heavy oil differentials blew out. Management team is committed to their dividend. Increased their dividend 10% last year and he expects another increase this year.

(A Top Pick June 29/12. Up 3.5%.) Fully integrated company with refineries in Canada and the US so they are getting better pricing than those companies not having a refinery.