Suncor Energy Inc (SU.TO)

In energy you want to buy the strong players, and in Canada this is the behemoth. It is an integrated company, so it gives you diversification. Owns wonderful assets and has a good balance sheet. Well-managed. The recent bid they made for Canadian Oil Sands (COS-T) illustrates that they are willing to be opportunistic. It could be a positive if they get it, but they don’t really need it. Dividend yield of 3.48%.

ZEO and ZEG probably outperform SU-T this year. SU-T will underperform as oil recovers.

(A Top Pick Dec 4/14. Up 2.87%.) Like most of the big majors, this has been very successful in lowering their costs. Secondly they have refineries and gas stations.

Has a 23% payout on a 3.1% dividend yield, which looks good. It is surprising to have an oil company with an expectation in earnings, going from $1.15 to $1.38 in 2016. If you want to play an oil turnaround in commodities, then this is a good opportunity.

They have done really well according to their recent results. He would not hold through 2017, because the earnings and cash flow have been falling as oil dropped, even if the stock price has held up. It will either go sideways or down.

Richly valued, but for a reason. An excellent quality company. If cautious about oil, but still want to participate, this valuation is worth it. Keep in mind that this is an integrated company, which tends to outperform other companies because they have the offset on the refinery side.

Right now this is in a no man’s land of a range of $29-$42. Damage has not been done nearly as bad as some other names. You could trade it within that range, or watch a break out at around $41 looking for resistance at around $48.

He would sell this, or even maybe Short it. Trading at ridiculous valuations. If you own this to benefit from a rally in the oil price headline, you are already paying for it. Looking at historical multiples, this is through the roof at 31X forward earnings. If you own Canadian Oil Sands (COS-T), he would Sell that too, because you have already benefited from their bid. The average Canadian portfolio manager has been underweight energy, which has been the right call. However, they need to have some energy exposure, so they buy this company, the largest component of the energy index. As oil recovers, this will be the very 1^st source of funds for portfolio managers in order to buy other oil stocks.

(A Top Pick Dec 17/14. Up 7.6%.) He disposed of his holdings 9 months ago and is currently zero weight in energy.

2/3rds of revenue are from refining. Margins have been massive since oil prices came down.

(Top Pick Jan 6/15, Up 13.48%) The premium oil sands company. They managed the company well and will be one of the survivors. You can hold it for the long term. The second half of 2016 is where he sees more upside to the oil price.

Suncor (SU-T) or Canadian Natural Resources (CNQ-T)? These are the 2 senior Canadian producers and are both great companies. They both look like they had a small bottom and are trying to move up. They both attract international money. Either one of these will work.

Canadian National Resources (CNQ-T) or Suncor (SU-T)? These are probably the top 2 he would be going into, but separating them out he would probably be a little more inclined to go to Suncor, just on valuation and growth potential. They are both quality growth producers and you should have both of them in your portfolio.

It might get Canadian Oil Sands (COS-T), but if not somebody else gets it, which means their 12% in Syncrude is worth more. The big thing is that it is an integrated play. You have 1500 Petro Canada gas stations and 5 refineries. Has a balance sheet to enable it to do things. It has Fort Hills coming on in 2017, which is going to be a big boost in production. Even if oil prices stay at present low levels, this is the one that you probably want to be with.

(Top Pick Oct 8/14, Up 0.14%) This is the best house in a bad neighbourhood. He would have no hesitation to add to it at these levels. Diversification is the key here with the upstream and oil sands exposure. He is not concerned whether the COS-T bid is successful or not.