Gibson Energy (GEI.TO)

(Market Call Minute) The storage business is doing well, but the trucking business is lagging.

Their last quarter wasn’t great as their wholesale part of their business wasn’t great. This is a very diverse business mix. A good way to play the recovery in the energy space. Thinks the dividend is safe.

Not a bad place to start adding. Doesn’t see this as an energy company, but more as a pipeline. Dividend yield of 8%, which he thinks they can maintain.

Model price $7.11. It has some losses coming up. He sees downside. It is bumping up against a red line. It has a real top here. He needs it to break out above this. He thinks it is above its max right here. He would not touch it.

A little early to get back into the mid-streamers. Expects there will be some volume declines. This is a company he is going to be taking a look at. If he is right and the price of oil falls again, some of the smaller producers are going to have to go bankrupt. He would be a buyer on the next dip. A very well-run company. Once volumes come down to a base level, which he thinks they will in the summer, he expects the company will be a Buy. They won’t have a problem if oil prices go down, just if volumes go down.

7.2% dividend - just increased. He increased his weighting at that time. He is pretty confident in the resiliency of their earnings. They plan to be a dividend grower. It is sustainable and he likes it here.

Big transporter and storer of oil. Has traded a lot with commodity prices, which is a little unjustified. Valuation wise it looks really compelling versus its peers. Have spent a lot of money on terminals and pipelines to gather oil in the heart of Edmonton for shipment. This should improve their cash flow profile. Has a lot of “take or pay” contracts which provides a lot of help. Dividend yield of 8.55%.

(A Top Pick Nov 27/14. Down 41.99%.) This has been disappointing. Was surprised at the amount of commodity-based sensitivity and activity based sensitivity that the company had. Also, when the differentials are very wide, there is a lot of use of their type of assets, but when differentials on heavy and light crudes are very narrow, it means that they have less so. He is going through his numbers and may change his opinion on this company.

This doesn’t rate very well in his strategies, and yet it is a good dividend payer. You are exposed to the activity in the oil/gas area, not so much the oil/gas prices. If you own, he would be tempted to stay with this even though it rates so low. Doesn’t feel the dividend is going to get cut at this point.

It has many divisions. They have a refinery, energy storage and transportation. They also have an environmental business. 5.6% dividend.

Energy infrastructure business. There are other parts such as trucking and environmental services and she does not favor them. She prefers other picks in that space.

He likes the fundamentals of the company. They are more involved with transportation and storage of oil from the oil sands.

Has trimmed some of his holdings. Did a relative look at several of the pipeline companies, and this one came out the weakest of the group. That doesn’t mean it is a bad thing to own. He doesn’t know what the growth prospects are. The change of the Government of Alberta is a “wait and see”, because the market tends to overreact when you get a change of government.

He ranks this more in with the pipelines. This is in the energy infrastructure and mostly works with rail, storage, delivery, etc. This is a pretty good entry point. His company has a $29 target.

This has always had a discounted valuation. A good part of their businesses marketing oil, terminaling, trucking. They have an NGL part of the business as well that is marketing oriented. By virtue of the types of businesses they are involved in, it is in a more volatile cash flow stream, which accounts for some of the discounted multiple. A great company. He has been adding to his positions. Just increased their dividend by 7%.