Long Run Exploration (LRE.TO)

Safe if you are a dividend investor. The perception is that their plays are not ‘A’ quality. A recent acquisition put LRE-T shares in the hands of investors who may not want to keep them. Wait 3 months for them to finish selling. Prefers others.

Doesn’t think the dividend is safe. A lot of these companies should not be paying dividends, or certainly not as large as they are. This company has made some acquisitions and they are trying to reposition their portfolio. Still have a lot of debt. Thinks they may sell some things sooner rather than later. The dividend is really handcuffing them from their ability to go out and make strategic longer-term decisions.

Thinks this is a real good one. Has a payout ratio of under 100%, a dividend of around 7.5%, and is trading at about 3.7X EV discounted to its cash flow, versus its peers of almost double that. Just bought some new properties that fit in well, which should help in terms of execution. A high-risk name, but a very good one to own.

(Market Call Minute.) Not a name he would have in his top 10. There are more exciting names, but in terms of a dividend payer it is fine.

After their acquisition some of the shareholders may sell out so it may stall for a short while. Likes other income names better, but he owns this one. $5.60 ceiling.

Looking to acquire Crocotta Energy (CTA-T). People that own this like it because of the stability of its income. The acquisition will build that case. A good, solid, dividend paying company, with some upside. There are other dividend players that he thinks may be a little more attractive.

Probably the cheapest yield name in the space for similar sized companies. Has been unloved. It’s probably about 2.5X cash flow where the average is 5 to 7 over the longer term. Just made a couple of acquisitions, this expands their plays. Increased their land inventory, and have a new core area. Looking for some good things to come out of this. Very cheap.

(A Top Pick August 9/13. Up 25.9%.) Have converted over to a dividend paying model, and it takes a period of time for the market to understand the sustainability and risks involved. Recently bought some assets that allow them to have a 3^rd area in their suite. Still trades at a discount to its peers.

Bought assets that were quite free cash flow positive. Lead by a strong management team. Thinks they are making good strides forward.

He has a small Short on this. Prefers growthier names to the dividend yield plays. This company has quite a bit of debt.

Management is doing a good job and going forward have a sound technical team and finance guys that do a good job of allocating capital. Low risk. Dividend is sustainable. There won’t be significant growth in the company, however.

Has recently added to his position and likes the dividend model. Feels dividend is sustainable. At these levels, you are getting paid 7% per year. The company is not trying to hit the ball out of the park with massive growth, but just trying to grow at 3%-5% a year. Expects high single digit, low double-digit total returns from the story. Doesn’t see the stock getting through $5.75 any time soon, but if you can Buy below $5.40, it is probably not a bad entry point.

Bought assets off Crew Energy last week, but it was not accretive in his mind. It just added to the inventory. 7.1% yield is a bit rich. Let it run a bit more, but there are better names for new capital.

(Top Pick May 21/13, Up 31.81%) They made another acquisition last week. They went into a dividend model, but they aren’t paying out that much of their cash flow. 50% Nat Gas. Raised their dividend to 7.44% late last year and he thinks the dividend could be increased again in 2015.

Transitioned into a dividend growth model. There is a long history with this name. About 55% oil, a good balance. Of the ones that have transitioned, they are more oily names because that is an easier model for transition. It always comes down to the model. Not sure all assets are de-risked enough. He is prepared to give management the opportunity to prove it out. Prefers some others (e.g. SGY, TOG).