Suncor Energy Inc (SU.TO)

This has been one of the great success stories. BV is $26.76. It got below that in Q1 of 2016. These companies are sitting very leveraged to the price of oil, so while they make money at $30 US oil, the stocks usually gets hit at that price. They have $16 billion in debt against $45 billion of equity, so they’re in pretty good shape. His view is that the stock will back off. If you can buy at under $30, that would be a great buy.

She likes it. Pay attention to free cash flow yield in integrated companies. Current projects will bring in some lumpy growth. She is looking for them to increase dividends and buy back shares. It ranks really well globally.

(Top Pick Mar 22/16, Up 16%) They made that acquisition of COS-T at very low prices. It helps bring down the overall cost of production. Energy stocks got way ahead of the price of crude and that is why they have not done as well so far this year as earlier.

You want to be wary about becoming too aggressive in energy stocks yet. We are seeing supply ramp up again. There was a big drawdown in the price of oil today. If it breaks $52, some of these oil stocks will be hit. This is the time of year for oil stocks. Between January and mid-May, the stock has gained about an average of 14.68%, and has been positive in 75% of the periods over the past 20 years. It did gap higher following its earnings in February by about $41. Dividend yield of 3.07%. (Analysts’ price target is $49.)

This is more of a cyclical trade than a long-term secular trade.

3.1% yield. You should own the larger cap names given the uncertainty with what Trump will do. Their cash costs of oil extraction have been coming down over the last little while. They did a good job of making acquisitions at the right time. They will drive their costs down even further. They can increase their dividend.

The issue is the oil price and the ability to extract oil at a low cost and move it into the market. They did a good job of being able to get it out of the oil sands. Fort Hills is coming on. Everything is favourable. He owns it and likes it and they pay a nice dividend. If oil prices stay at nice levels this will be a great name to own. He wants to own the ability of the assets to earn cash flows for his clients.

The absolute winner in the Canadian energy play. The stock has done very well and has not been hit like many of the others. They have the balance sheet, they have the assets, and they are in a position of either high energy prices or low energy prices to continue to build their company, and acquire good properties on the cheap. He still likes this.

(A Top Pick Jan 7/16. Up 25.58%.) Still one of his favourites. Sort of the benchmark in the Canadian industry. It is the largest and most diversified. An extremely well-managed company. At the current price, he wouldn’t be running out to buy it. Prefers to get it in the mid-$30.

His bias is towards smaller companies of $3-$5 billion. This is the largest constituent of the index. When he looks at this, he thinks of boring, low growth, a company with a lack of meaningful take away capacity, a company imposing massive carbon taxes. He would prefer a smaller, more nimbler company with a higher ability to grow production such as Cardinal Energy (CJ-T) or Whitecap (WCP-T).

The large player in the Canadian oil/gas sector. If you think oil prices are going to continue to trend up, then it is one you want to invest in. He tends to look for companies that have a more accelerated growth profile, so he goes into smaller companies that have more of a production growth profile.

He sees this having 16% production growth from 2016 to 2018, resulting in 22% cash flow per share growth. They easily pay their dividend. The only thing he doesn’t like is that it is trading above its peers at 8.8X, versus its peer average of 7.9X. Try to buy at a slightly lower level.

(A Top Pick Aug 17/16. Up 21.34%.) This had really terrific results shortly after he had recommended it. A very well-run company. It doesn’t face a lot of the same type of problems that a lot of energy companies face. A very disciplined and well run company.

This is the goto name, the largest cap name and one that Americans love to own. Fort Hills is just being finished up and will give them a bounce in the volume this year. They have done a very good job of driving costs down. If we break $40 oil then you will have another great purchasing opportunity.

Long term it is probably not that great. He used to be short, but covered it when he became a little more constructive on oil. The long term picture for someone in the oil sands is not that great.