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

COMMENT

Spinning of the integrated assets and keeping the pure play natural gas. Very intrigued by this. If you own, when they split off you should keep both companies. Good long-term hold.

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COMMENT

Will be splitting between oil and gas, which will be a good thing. If you think natural gas will recover in a year, it could be a good point to enter as a speculation. Near-term earnings are not there.

DON'T BUY

Re-announced splitting into oil and gas, causing a blip. Unlikely to go much higher in the next couple of months. Would keep both after the split if holding before.

HOLD

Announced they are going to split into 2 companies, one for gas and one for oil. Thinks it will be $20US for the oil company and $45 for the gas. If you own, keep both divisions as there is a chance that the oil division may end up becoming more of a takeover target.

HOLD

Have just announced they will be splitting their oil and natural gas assets with oil being Cenovus Energy Inc. effective Nov 30.09. For more conservative senior players it is probably a Buy at this price.

DON'T BUY

You have every right to be concerned about this because of the natural gas prices. At the end of the last recession, 2001-2002, natural gas bottomed around $2 and we are currently at $2.74. Despite global growth/Chinese demand, natural gas is purely a domestic commodity. We need economic recovery and increase in industrial production to drive natural gas demand.

TOP PICK

Hedged 2/3rds of their 2009 natural gas production at about $9 and about 45% of 2010 at over $6 so that is protecting their cash flow and capital spending program. Gas at $3 is way out of whack with the price of crude. With a significant decline in drilling and a pickup in industrial activity, gas prices should start to move higher next year.

TOP PICK

Largest oil/gas exploration and production. Actually an integrated because of its joint venture on refining with Conoco Phillips (COP-N). Off about 15% over the last year. Reasonable yield of 3%. Well run company. 1st choice if you are buying something with a big gas exposure on the expectation that gas is coming back.

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PAST TOP PICK

(A Top Pick Feb 20/09. Up 20.87%.)

PAST TOP PICK

(A Top Pick Aug 22/08. Down 22.05%.)

BUY

Biggest and most liquid way to play natural gas prices. Have hedged about half their natural gas prices next year at over $6. Good balance sheet. Have some of the best gas plays in North America.

PAST TOP PICK

(A Top Pick Aug 20/08. Down 21.61%.)

TOP PICK

80% natural gas. This is a name to own for exposure to natural gas. Have done a good job reducing costs.

BUY

Reporting very soon and it should be a good quarter. Have been selling assets at attractive valuations and hedging their natural gas contracts.

DON'T BUY

This is a major play in North America on natural gas, which is why the stock has lagged. Long-term this puts them in a good position but not over the next year unless something dramatic happens, as gas prices will probably stay down.

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Encana Corp (ECA.TO)