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Nexen Inc (NXY.TO)

DON'T BUY
He has a model price of $14.40, a negative 12.5% differential.
COMMENT
Likes their oil sands holdings. Also have assets in Yemen and in the gulf of Mexico. Good big cap company. Could be a takeover target.
HOLD
(Market Call Minute.) Recently increased position in Long Lake and good upside through its oil sands.
TOP PICK
Profit growth although it is clear that profitability is going to collapse in this sector going forward. Still thinks oil prices are going to bounce back to the $70’s and maybe $80.
COMMENT
You have to make a call on oil prices. Thinks oil prices will recover later on this year to $80-$100. Recently changed CEO’s and their strategy needs to be redefined and clarified.
BUY
Sold half his holdings on the run-up on a takeover rumour. Nice company to hold longer-term. Thinks there is still 5% or 10% in the stock price on a takeover possibility. Would buy under $20.
COMMENT
Delaying their Long Lake project until 2010. Not economic at these levels. This delay will help them build the balance sheet. Extremely low multiple. Prefers Talisman (TLM-T).
TOP PICK
Very high ROE levels. Well positioned to withstand the hit there has been on the oil price. Extremely cheap. Looking for a 20%-30% gain.
HOLD
It appears that Total was in the process of firming up an offer. Until the financial market settles down he wouldn't Buy on the expectation that it will get taken out. Not a favourite but at this price it is probably okay.
COMMENT
Rumours of a takeover but also that it was called off. Very inexpensive on every metric. Have cash. Really cheap and has some decent assets.
HOLD
(Market Call Minute.) Looks like a takeover is coming at $38. If it doesn't happen, the stock probably goes back to $20.
COMMENT
Possibility of being acquired so the stock has gone up on rumours.
BUY
For energy plays, he prefers royalty trusts so that he can get a big income stream and sit on yield. If you are positive on energy prices going forward, this is very reasonable right now. Lots of reserve life.
COMMENT
Stock has been wiped out. Trades at the lowest multiple of cash flow it has ever traded. Great assets. If you own, don't sell. If you want to speculate on oil going higher and with any kind of time horizon, it is probably a buy.
TOP PICK
Have had some disappointments on production. Thinks corporate activity starts to pick up in the sector. In the mining sector and this one, it will be a lot cheaper for companies to grow through acquisition. Generating cash and have projects on the go. Valuation is screamingly cheap.
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