Suncor Energy Inc (SU.TO)

Has rallied with the rallying in crude. All energy stocks probably got oversold when crude went below $30. The market is looking ahead thinking that in the back half of the year there is going to be a recovery. This is the premier oil sands company and very leveraged to crude oil prices. Good operator. She is not yet convinced that this is a sustainable rally, and wouldn’t step in here because of the strength in energy names. Wait for another pullback and there may be a more sustainable rally going into the back half of the year.

(Market call minute.) He would be fine owning this. Good balance sheet and are going to weather the storm and make some good acquisitions along the way.

He has no opinion on oil, or at least where it is going. You could have bought this one at $27 and now it is $35. He thinks the high will be $40 so you could trim here.

The new acquisition bringing COS-T into their mix changes their revenue stream to be more balanced so it will have more volatility to it because their revenue is more evenly split between exploration and refining & marketing. They are still very diversified. Right here, right now he does not like. In the low $30s he would like it. He thinks it will hit lows later in the year.

It is a ‘tomorrow’ stock. A year or three down the road, energy stocks will be better than they are now. Theirs is one of the safest dividends.

A great company. One of the first to get religion in terms of looking at things from a profitability standpoint and talking about free cash flow. That was a game changer. He used to own, but doesn’t anymore, mostly because of valuations. Also, thinks oil will probably pull back, especially as we get into the refinery turn around season, which should be starting shortly.

If you own this, you have actually done a lot better than oil and the other energy stocks over the last year, which doesn’t say much, but you’ve lost less money. The deal with the Canadian Oil Sands (COS-T) is a nice tuck-in acquisition with an asset they already own. You will have an increase in the dividends. If you are going to be in one energy stock in North America, this is the one you want to be in.

Energy is a sector he has avoided from July 2014 until towards the end of this January when we started to see some improvement. Over the next year or 2 there is going to be a lot of consolidation and a lot of companies that will go away. He probably has a half weight in the market. His main choice was Canadian Natural Resources (CNQ-T), but this company would fit in too. Wouldn’t have a problem owning this.

Relatively expensive and does extremely well, but over 2-5 years, the stock doesn’t look like it is going anywhere. When the market is going down, stock market players hide in this kind of stock because it holds up better than anything else, which is why the stock price did not go down. Ironically if oil takes off, all those people have to sell in order to buy stocks that have more torque. If you want leverage out of this oil price, it has to be something else. He is using it to get the yield, and thinks that incrementally it will grow over time and he’ll get his money at 7%-8%, but it is going to be very gradual. You won’t get any leverage out of this in the immediate run up of oil.

Given the run we have had, she would not be buying anything in energy right now. There is a possible pull back in crude. We are seasonally going into a period of refinery shut downs where inventory grows. It is a good name longer term.

This hasn’t suffered like the other energy companies because of their integrated operations. Chart shows a range that was formed in 2015, and we are now below that range, and we are at the resistance right now.

They just reported they are going to write off $2 Billion. The $20 model price does not include this. It is trading at book value so it is cheap compared to where it has been. We could have a trade to $35.58 or if it broke below his EBV level of $29 then sell.

With the COS-T agreement they reached today it will be quite accretive. He thinks there are more synergies than they told people about. They have the downstream assets to support the business and now they have the oil sands.

It is seen as a safe harbour. The COS-T acquision has been a bit of an overhang. It gives you a chance to buy. The balance sheet is in good shape. It is a great place to hide during this down turn.

Doesn’t like the Canadian energy sector. Has no idea where energy prices go, but if they don’t rise above $50, then companies like this have further downside to the stock price. An incredibly well-managed company and well financed, and will be a survivor.