Petro-Canada (PCA.TO)

PAST TOP PICK
(A Top Pick Aug 1/07. Up 1%.) Picked because she saw a compelling valuation. Debt has continued to grow. Talking about a turnaround in 2008 at a number of facilities for an impact on production and cash flow. Not buying any more at this time.
BUY
Cheap. They have an oil sands component and maybe, like Encana (ECA-T) they will split the company. Thinks good things are going to happen.
TOP PICK
His model price is now $92.15, a 70% positive differential. This is one of the cheapest oils out there.
BUY
It just triggered a Buy yesterday as it is just clearing that range it has been trading in since it peaked last July. There is a lot of volume coming in and the price gain was good. Another oil/gas stock that is starting to move.
TOP PICK
Well diversified and the price is compelling. Over the next 2 years it will earn well over $10 in cash flow. Earns ROE of over 20% but is selling at 2X book. Where the worries might occur are over the downstream operations over the next year or two and to how quickly they can pass increases on to customers.
WEAK BUY
He doesn't see any justification for the current price in oil. Thinks it has rolled over into pure speculation based on the US$. This stock is certainly cheap, but would not be putting a substantial position into it right now. Had a very nice bounce off its recent low.
DON'T BUY
Trading around its net asset value. A little concerned about their debt. Prefers others.
PARTIAL SELL
Looking at a year coming up where production will probably be down. Excellent assets. Had a good bounce recently and you could probably lighten up on the stock at around this price. Production is not growing.
DON'T BUY
This has been a perennial disappointment. It has not mastered under promising and over delivering. Has the framework to be a great company but hasn't been able to achieve it.
BUY
(Market Call Minute.) Undervalued.
COMMENT
Refining margins are down, so even though they are getting $100 for oil, if you have to sell it for $1.15 at the gas station, it is less profitable.
PAST TOP PICK
(A Top Pick Mar 16/07. Up 21%.) Long-term fundamentals are still good. Will be spending $5 billion a year on CapX projects. Thinks it will cash flow about $10 a year for the next 2 years. His Still a Buy for long-term investors.
BUY
(Market Call Minute.) Thinks that within a year it will finally turn around.
COMMENT
Statistically cheap but lags because lack of near-term growth, not for balance sheet reasons.
COMMENT
This has been a management that has over promised and under delivered. While the assets and potential are great, they haven't been delivering their way they should. Hopefully this will change. (See his comments on Talisman under Top Picks.)
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