Gibson Energy (GEI.TO)

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%.

Of the midstream peers that he looks at, this has the most commodity exposure, because of their trucking and terminals business and their oilfield services business. Great management team. Their assets in Edmonton are phenomenal. This is the cheapest of their peers. Trades at a discount, but thinks this is acceptable at certain levels here.

Has a model price of $22.71 or -16%. No one knows what is going to happen to the price of oil. He is concerned about the dividend as they are not covering with earnings. He is skeptical on the oil patch. There is more pain to go.

Solid company and in a trading range between $22 and $27. We will know in 6 months which end of the range it breaks out of. It has only been public in a bull market. He wants to see three quarters.

One issue is that only about 30% of their EBITDA is actually coming from infrastructure. The rest is coming from marketing, environmental services and trucking, which are much more volatile businesses and price sensitive to swings in energy. Still trades at a very high PE at about 28X, in line with the group. If you own, consider selling Calls.

Chart shows a long upward trend until late 2014 followed by “a flight pattern of a brick”. He can see some support at current levels that may or may not occur. It is hard to predict where support will come in. When it stops going down, making lower highs and lower lows, and then starts to base, that might be a time to Buy in.

The stock has come off fairly sharp along with pretty much everything else in the energy sector. Although they may not have direct commodity exposure, the big market they deal with is transporting and if the oil companies are producing less, they will not be using this company’s services the way they have in the past. He would want to see the oil price stabilize, some type of improvement in their earnings profile, and watch for the technicals to improve before going into a name like this.

They came out in the last few days and announced increased capital expenditures. Payout ratio of 60% and relatively modest exposure to oil. A great company. They are not cutting the dividend.

Earnings expectations have been priced into the market. They are the most exposed to oil in the energy infrastructure space. He expects a 10% drop in earnings, but the stock has dropped 30%. Thinks they will continue to raise their dividend. Thinks it is a great value.

He sees this as a much more substantial, important company and is into all manner of infrastructure services. Probably coming into a very good pricing area. Pays a good dividend.

(Top Pick Jan 8/14, Up 13%) Transportation division is producing at great rates and created new transportation hubs. Great third quarter read. They get a repeat star.

Diversified mid-stream player with pipelines, terminals, trucking and propane. Anything energy-related seems to have gotten killed over the last 1.5-2 months and this is no exception. However, this creates some opportunities for investors with longer-term views. Feels the concerns about the selloff in energy, as it relates to this company, is probably a little overdone. Management doesn't see a tremendous amount of slowdown in activity. Longer-term, this is a good company.