Kelt Exploration (KEL.TO)

(A Top Pick Apr 5/17, Down 8.80%) It is viewed as a gas company. It has outperformed, but it is still caught up a bit in being a gas company when in fact they have oil.

Have grown their reserves 20%. Are moving away from natural gas to oily products. He prefers oil over natural gas. They've been selling non-core assets to reduce debt. Good management. (Analysts' price target is $9.63.)

They have really built up a wonderful suite of assets. Some are tops in the class. They may be selling the company in the next 1 to 3 years (she is predicting).

Has nothing against this company other than the valuation. It always has and always will afford a premium multiple. Because it didn't sell off by the same magnitude as other names, he thinks the best opportunity is in either server sectors or the odd oil name, more so in the US than in Canada.

This is in the right space, and can have some really big upside. Chart shows it has formed a nice base and if it can get above that it has some free room to spread its wings. (Analysts' price target is $9.13.)

On a shorter-term chart, the stock is doing quite well, a gentle but up channel. There has been 2.5 years of overhead supply, and we have about 2 years of uptrend, so a good portion of overhead supply should have been digested, although the upside will be somewhat limited. It should still stay in a gentle up channel.

If you are not in energy, a middle of the road and conservative investor, this would be part of a larger portfolio. Chart shows a nice basing pattern through 2017. Once it breaks out of there, he is looking for $10. Their margins have been really good. (Analysts' price target is $9.13.)

This started out as a gas play, but there is more oil to it. The stock market is still supporting the top companies, and this one is easily in the top 5 gas drillers in Western Canada. His problem is that he just can't get his head around gas. There is just too much of it. He would rather own the infrastructure such as pipelines.

Has really good cash flow. The chart shows a bottom that started at the beginning of 2016 and has moved up and formed a nice base in 2017. If it gets above about $7.50, there are pretty big blue skies following. (Analysts’ price target is $9.13.)

Has a management team he can’t speak highly enough about. They’ve created a tremendous amount of value. There is not a great enough rate of change to be able to justify it on a cash flow basis, you have to take more of an asset approach. They are still in the learning curve of delineating their acreage. Well results this year have been very good. Due to where they are drilling, they are getting more liquids and less natural gas. However, you are paying a bit of a premium relative to some of their peers. He finds other names a little more attractive.

This has been a mainstay in his energy growth portfolio. It has been a pretty good performer this year. The industry views this as a natural gas stock, but they have some very nice oil pools, more specifically liquid natural gas. This is why you have seen the stock start to pick up in the last week or so. Great management. If you are looking for a growth energy stock, which comes with the volatility, this would be a name. (See Top Picks.)

(Market Call Minute.) A great name. A Montney producer in BC and Alberta. Just came out with some updated drill results. Big words you will hear in the Canadian space is ERH, Extended Reach Horizontals and HIFI, Increased Staged Fracing. They’ve put out some good numbers.

It would not be affected if the trans-mountain pipeline was stopped as they produce more condensates, which go to the oil sands. They do, however, do some fracking, which could get stopped by government intervention. They put out an okay quarter last night.

An exceptionally strong management team. A good solid balance sheet and a low-cost resource. They own a lot of their infrastructure and have access to many different outputs should one break down. Management team has shifted from being an exploration company to more of a development program. They’ve proven up reserves which are very, very substantial, and well delineated. Their natural gas is very liquids rich, and the wells they are drilling have been very extensive. He thinks this company is easily a double in a more normal energy price environment. Really strong management team which owns about 20% of the company.

A really dynamic group. You will get a return when they discover a lot of resource. It is going to be harder to see with their strategy, but one day you will wake up and the company will have found a huge amount of resource, and it will just get sold to somebody. This is one that you just have to sit on and let them do their thing.