Encana Corp (ECA.TO)

Normally around this time of year, gas stocks do okay because of weather. This year Encana seems to be trying to form a base pattern. Stocks like this normally reach the end of their seasonal pattern right around May so you have another few more weeks to get a trade-in.

Fears that people are going to go to this as a “go to” name for exposure to natural gas. It will probably go higher if natural gas continues to go higher, which he thinks it will. However, the problem with this company is credibility. They got out of oil at the wrong time. Then they got into natural gas liquids in a big way at a time when those prices were falling. Now they have really cut their production of natural gas liquids. There are better names. (See Top Picks.)

There are two sides to the energy play this year. Nat gas has been doing fabulous. ECA is has support around the $17 range and we are in that range and so it is probably a worthy play. Watch RSI or Stochastics for a hook up and then it looks like a play.

(Top Pick Mar 27/12, Up 0.75%) Nat. Gas has moved but not that far on a full year basis. With the overabundance in Gas, you have to pick the companies that can outlast periods of weakness. Over a couple of years we could see some good gains in this stock.

Sees Nat Gas trading from Mid-$2s to mid-$4s until LNG starts exporting and we bring down the surplus in North America. Encana is the biggest player in North America. Bought recently for clients around $19. The best he will see is $22-$23. He will sell if anything bad happens above $22. FCG is an ETF in the US and is also a nice way to play Nat Gas.

(A Top Pick April 13/12. Up 15.21%.) He is quite bullish on natural gas. If the market turns, you want to look for assets that are probably not going to get beaten up. Natural gas is definitely in a bull market because we have not made a new low for almost a year.

(Market Call Minute) Lots of cushion on the balance sheet and ability to raise more cash. He is averaging into it below $20.

Wildly bullish. Valuation is great. He doesn’t see a catalyst. You can hold for years and years.

Suffering from exposure to dry natural gas. To counter that, the capital spending they are doing this year, 50% is going to natural gas liquids and 25% to oils. Good yield of 4.4%. He would prefer others.

Just guided lower for production. Made a bet towards dry gas when liquid rich gases were the place to be. They moved back towards liquid rich gas. Now they have said they are going to drill again for dry gases. People are confused as to what their strategy is. Have a reasonable hedge book so he doesn’t think there is any danger but is still trading a little more expensive than peers.

(A Top Pick Jan 27/12. Up 2.99%.) Likes the chart. Not too excited about the energy space, especially the oily side. Thinks gas is in the early stages of a bull.

With the issue of management change and what is going to happen, a lot of people are still turned off because of Cenovus (CVE-T) being spun off. Making a lot of progress on the liquids side. Stock is very cheap, but until natural gas prices recover, which may take it into the winter of 2013-2014, the stock will be in a holding pattern. If you see the stock drop into the $17 range, you’d want to get this for the long-term. Fabulous land position and their cost structure is very good.

(Market Call Minute.) Would avoid this. Have a caretaker CEOand a lack of strategy. Were late in growing their liquids.

Doing a joint venture with China and will put it in a better position. She likes it here and it is a good entry point.

Continues to be bearish on natural gas. Remains cautious until there is a little more activity on natural gas consumption. Gas storage is better this year than he had expected but it is still above the five-year average.