Encana Corp (ECA.TO) Buy, Sell or Hold

Encana Corp (ECA.TO)

4.96

-0.23 (4.43%)

as of Jan 24, 2020, 9:00:00 pm Market Open.

267 watching

WATCH

Commodity business, purely natural gas. Depends on your view of gas. There is a record surplus of gas in storage, winter was warm and now we are in a situation where there is so much coming on stream, it could go down. These companies really aren’t making any money. ECA has great assets, but he thinks prices will stay cheap for quite a while and if shares fall enough he would buy it.

DON'T BUY

Natural gas. Is not as much gas coming out of storage as there should be. It will probably be her conditioning season in June/July before you see an increase in prices. Wouldn't be in any hurry on this one.

DON'T BUY

Too much natural gas in North America. Supplies and inventory are so great that producers are capping wells. Particularly with a warm winter we are having in eastern North America, the heating season has been a bust.

TOP PICK

He is looking at a 9-month 5 wave bear. Chart for 2011 shows one of the worst extreme bears he has seen in a large cap energy stock. Too much deviation from the 50 and 200 days, so is clearly oversold.

DON'T BUY

Short-term possibility for profits? Down over 35% over the last 12 months but year-to-date is up almost 12%. This goes in hand with natural gas prices moving up slightly due to some production being taken off-line. Still a tremendous oversupply, inventory is quite high and we are having some pretty warm weather. Outlook for natural gas is still pretty negative.

COMMENT

There has been a huge collapse in the prices of most gas stocks in the last couple of weeks, particularly in the higher growth names. In the near-term, this one looks good. She is bearish on natural gas but feels it has been over done. Expect there will be more shutting down of dry gas production, which will be positive for gas prices. This one should be good for the next 12 months but she does have concerns because their focus is so much on dry gas. (See Top Picks.)

TOP PICK

Severely undervalued. Natural gas prices have created a selloff, which he feels has been overdone. Nice dividend. Have some of the best properties in North America for natural gas resource development. Well-managed. 3-5 year outlook for this.

DON'T BUY

Nat Gas: Was a big fan about a year ago. When they spit he got out of it. Price of gas has gone lower than he figured. Cash flow will slow considerably.

WAIT

Natural gas is about $2.50 so not many companies are making my money on Natural Gas. Eventually the price will get to the point where it is self-corrected. It’s too late to short because it has already gone down so far. He thinks they will try to maintain the dividend if they can. He is not buy Nat. Gas stocks, as it is a little early. He is in the process of selecting a Nat. Gas stock. Wait until Gas turns.

COMMENT

If this company stays too cheap for too long, it will come into play as a takeover candidate. To buy would be a speculation as opposed to an investment.

DON'T BUY

All natural gas assets and the natural gas environment is in horrible shape. Dividend is safe. Well capitalized. Have hedged out their production. The trouble is, what happens in 2014-2015?

COMMENT

Price of natural gas is unbelievably horrible. This company is essentially 100% natural gas and is in big trouble. He would see them probably committing most of their budget to look for oil or natural gas liquids.

HOLD

This is one he struggles with. They do have a dividend and he thinks it will increase over time, but it is definitely an under performer. Low cost producer and finding lots of gas but as they find more and their competitors find more, the price goes down. They addressed their balance sheet problems. It could be dead money for 18-28 months.

PAST TOP PICK

(A Top Pick Apr 1/11. Down 40.7%.) A nasty chart and he would not add to the position.

SELL

Would shift to an oil stock. There is a disruptive technology in natural gas that you don’t see in any other commodity where there has been so much new supply created. Doesn’t feel natural gas prices are going anywhere for a long time.

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Encana Corp (ECA.TO)