Painted Pony Energy (PONY.TO)

Among the junior intermediates, this is a well-managed company. At these levels, this has caught his attention. They run a very good operation, and tend to have a fairly good discipline on their capital deployment. This is one he would be looking at to add in the near future.

(Top Pick Sep 19/16, Down 60%) It has really fallen. He owns it because it is the third largest Nat Gas reserve of the publicly traded companies. It is one of the fastest growing Nat Gas companies. This year they did an acquisition that was medium to long term accretive. Then their bank line was pushed and they issued debt. Now Nat Gas has fallen in half. We need improvement in Nat Gas pricing through exports.

This is clearly in a downward trend. That is not unusual. Most of the Canadian energy stocks have been in that trend for the last while. There is good reason to believe that the company, mainly a gas producer, is going to show signs of bottoming. The stock has support just below current levels. Other gassy stocks, during the last couple of weeks, has started to form some base building patterns. He would like to see this perform a technical pattern before recommending it. Put it on your radar list, because historically these kinds of stocks do well at this time of year.

Hasn’t held this for about 2 years. If bullish on Canadian gas, this is not a bad name. They’ve suffered from an equity issuance they did earlier this year, where they diluted the shareholder base by about 58%. That was to get more drilling depth acreage, more contiguous where they can draw longer laterals. Trading inexpensively relative to its inventory depth, but there is a lack of a lot of pipeline, and thinks it will continue to sell at a disconnect. There are better names in the US.

A couple of years downtrend broke, which is a good thing.Then we took out the last low so it is officially in a down trend.

Production metrics fell off but the management team are always looking further out. Short term they are negative, but positive long term.

When companies tell us they have great assets, and then go out and buy something else, he wonders why they have to do that. The company is in the penalty box.

Did an acquisition which really ticked off a lot of investors diluting the share count by about 50%. The attraction of the company was that they had very good well results and very, very deep inventory. Management has had a tough time selling this. You just have to wait for this to clear. It screens very well on a valuation relative to growth rate. Extremely inexpensive relative to the growth rate and the running room they have now acquired.

This is more of a gas stock than anything else. Historically, these stocks do very well from around the last week in January to around the end of April. This year, that didn’t happen, and the technicals didn’t support the seasonal trade. Look for better opportunities elsewhere.

Recently hit his radar screens. Seems to be a well-managed company. They hit the pocket when a lot of the energy companies were having some difficulties. Have very good land positions. He is looking at this as a possible purchase.

He avoided the face plant they did. There are concerns about Canadian gas pricing. It is cheap. They reduced their cap-x. The stock fell in half and then they diluted by 59%.

A small company in the Montney gas play. They have big resources and big upside if they were to be acquired. The issue is that gas prices have been pretty weak. They continue to issue stock to finance their activity, which is negative for the stock in the short term.

(A Top Pick March 14/16. Up 26.62%.) He still likes this company. Natural gas prices have weakened considerably, particularly in Western Canada.

The company is looking for production growth of about 80% in 2017 and 40% in 2018. There is no other natural gas player in Western Canada that has those kinds of growth rates. The valuation is actually below the average of their peers, which is also very attractive. (Analysts’ price target is $10.)

A natural gas producer in Northeast BC. Have done an excellent job in executing their growth plan. They’ve got big plans out to 2020, and thinks they kind of want to broach that 100,000 barrels’ equivalent mark, and are currently at about 40,000. They have stepwise plan for adding infrastructure with their partner, AltaGas (ALA-T). AltaGas has built a plant, and have another phase planned. His issue is that they have vastly outspent cash flow and have ramped up debt levels. Management has done a fantastic job.