John KimEnerplus CorpERF.TOTOP PICKJul 11, 2016

Its takeover by a bigger player should attract institutional players, and should lead to a rerating. He's been buying the parent company CHRD, now a full position of 4%. Deepest inventory in the area of any producer.

Never sell because a stock hits a 52-week, but only based on risk/reward. ERF is being bought by a North Dakota producer, Chord Energy Management have done a great job. They struggled after selling their Canadian assets and held onto their North Dakota Marcellus assets. 

Jumping a massive 10% today on the news, and returning to its previous high. A positive move.

ERF is very cheap and has a very solid balance sheet. The forecast release was not great, but it is not really an issue with the company. As noted, 4Q production also did beat production estimates. Consensus still calls for about 20% growth this year. It is hard to fight declining commodity prices, but based on its valuation and balance sheet we would consider it a HOLD and a BUY on any further weakness.
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At least 15 years of drilling inventory in Bakken play. Very strong balance sheet (almost no debt). Expecting ~60% of free cash flow returning to shareholders. Trading under 3x cash flow with $80 oil. Expecting ~$29 share price next year given $80 oil. Expecting strong performance in 2024. Value proposition very strong. 

Owns ~5 million shares in company (~5% of shares).
Oil assets very profitable. 
Management team very good.
Expecting ~60% of free cash flow being returned to shareholders. 
Current share price under-valued.

Sold because he became very bearish on natural gas, bullish on oil. Lots of drilling and no real winter last year meant that storage was high. Still on his radar, but no price catalyst until this time next year. Minimizing growth and maximizing free cashflow, buybacks, very aggressive.

The chart is heading down and looking for a base. It is OK to own even if moving sideways since it pays a dividend of $0.074 cents a share. Be cautious. Another 5 out of 10 chart.

He sold. He's negative on natural gas. He just wants to own Canadian heavy oil. Valuation remains compelling. Great quality assets. Attractive on free cashflow and buybacks. He could be back in some day.

Has since sold shares. 
Bearish on natural gas prices. 
Wants to focus on light to medium oil names.
Better names out there to earn return on capital.

Pure USA Bakken & Marcellus play.
12-15 years of drilling inventory.
Trading at 2.2x times cash flow (fair value = 5x).
Expecting meaningful appreciation of shares.