Raging River Exploration (RRX.TO)

There was a weakness in shares after takeover rumours died down. However, a takeover may be in play now because others are looking at it. One of the best balance sheets in the Canadian oil sector. He likes this.

Pretty good valuation. A good balance sheet, but the problem is trend. He has got to wait to see these stocks find a bottom. It is a reasonable valuation.

It has been thrown out with the bath water. It has a top quartile management team. They have significant internally funded growth from this company. There is a possibility they will beat their guidance. (Analyst target: $13.00).

Basically one play in Saskatchewan. Good management team. It can provide a lot of growth. They are able to re-funnel their cash and keep growing the asset. (Analysts’ price target is $13.27.)

Thinks the oil crash has given this company a whole new lease and purpose. When oil was at $100, management was talking about being close to having to become a dividend player or have to sell the company. In this environment, they have been very successful in acquiring other assets, and that has been sort of their growth strategy. Production is at only 20,000 barrels a day, so they still have a lot of room to grow as a consolidator in their industry.

(A Top Pick Sept 8/15. Up 34.07%.) Had bought this in September when oils were having a really rough time. Felt that it was a defensive play in a tough sector. They can make money at $40 oil, and actually grow production at $50 oil. In a market where there is improving sentiment for oil, defensive stocks like this are not going to do as well. He has exited his position.

A top notch team which has really executed. They’ve always formulaically run the business. Low debt. They always beat their numbers. Also, they do smart deals. They are getting to a point in terms of size and lifecycle where it is less of an acquisition candidate.

Used to own this. When valuations got a little excessive, he sold it and that was a mistake. This is high margin, because they sell a light oil product. They make more money than any other company in Western Canada, basically on the margin side. They are doing an incredible job, and don’t seem to be running out of things to do them.

(A Top Pick Sept 8/15. Up 9.72%.) Light oil. Pristine balance sheet. Also, has some of the best netbacks in the business. At $30-$35 oil, they can actually increase production. Still a buy. (See Top Picks.)

(A Top Pick Feb 12/15. Up 4.76%.) This company is extremely impressive. It has done everything that a company should be doing in this environment. Had lots of free cash flow potential and an extremely healthy balance sheet.

They are the best at exploiting the Viking formation in Saskatchewan and parts of Alberta. Have reduced their costs and capital efficiencies. This is an experienced management team. He would continue betting with the same group.

A non-dividend payer, but one of the best management teams, best assets, etc. As a consequence you are being asked to pay a rather high price, which he personally cannot stomach. He would rather go to a name which may be inefficiently priced. On this one you are paying 9.3X on $55 oil. They have guided that they want to slow down their growth in order to elongate their inventory, with the eventual conversion to a dividend payer.

One of the few energy names that gets him excited. There are a handful of these companies that can cash flow at prices where they are now. At $50 a barrel, they can cash flow, and even grow their operations. Stellar balance sheet.

(Past Top Pick, Feb 12, 2015, down 5%) Recommended at 8.40 now 7.98. Has held up pretty well. "Is a darling", This is one company that you will see good things to come, in years to come.

(Market Call Minute.) Super quality management team and it trades as such. They are increasing (?) their growth rate eventual into a dividend model. Good CEO. It’s just that the multiple is a little rich compared to other opportunities.