Suncor Energy Inc (SU.TO)

Good for a 3-5 year hold? Hasn't owned this for a long time. Finds the dividend is lower than what he likes to see. In this environment, this might be a good one because it is a solid, big company. He would wait for some price stability.

He thinks there is an overreaction of the market selling this down. Thinks they will continue to be gushing cash flow. 4 times cash flow and sometimes it has been as high as 6 in the past. Their retail margins are holding up.

(A large cap stock and the only large caps he would own in his portfolio are Crescent Point (CPG-T) and Canadian Natural Resources (CNQ-T).) He can see the investment merits for this company. It is an integrated model, so you are getting the downstream in addition to the upstream. A very large free cash flow generator. Expects the free cash flow next year is probably in the order of $2-$3 billion. The company can either pursue share repurchases or increase the dividend. Expects an increase in the dividend will be 10%-15% next year. Valuation is quite reasonable.

It is defensive and has not been hit as hard as others. Downstream operation should continue to be profitable for them. When oil prices go down the price of products are slow to respond and this increases profits. It is a good value here.

Likes it. He would buy it here because oil is coming down to the $80 dollar mark and the question is where it is going from here. He prefers this kind of company because he is comfortable holding companies that are completely integrated. It is all about operating net backs.

The problem that most Canadians have had is that 20%-30% of the TSX composite is made up of energy and commodities. You shouldn’t have to pay that much as far as multiples expanding and going up and down. Very cyclical. Nobody seems to know when to sell these. Doesn't feel it is a buy-and-hold.

Suncor (SU-T) or Crescent Point (CPG-T)? Two totally different stocks. We might still see oil production pushing down here a little bit, but that will take a little while for it to roll through. He looks at this from a seasonal perspective. If the oil sector really starts to ramp up here, you are going to get more bang for your buck out of Crescent Point. Because the energy sector is out of its seasonal period, he would be going with a more defensive oil play, which is Suncor.

When you see the West to East pipeline, which he hopes comes to pass, you are going to see an awful lot of increase in refining activity in Québec and points east, and this company will benefit from that. Wait to see more progress on the pipeline.

He waited 3 years after the Petro Canada acquisition to see if they could digest it. This now a fantastic investment in the energy space. Thinks it is a stock he can own for a long time. It is throwing off free cash flow for the first time.

There is no way to know where the oil price will go in a couple of years. It is hard to invest in this area. It is a high cost producer with the majority of assets tied up in the tar sands so when oil sells off it gets hit more. But he likes their integrated structure with the upstream and downstream. He just doesn’t see a lot of upside here. He would like to see it a lot lower before adding to it.

Baytex Energy (BTE-T) or Suncor (SU-T)? Certainly 2 very different names. Baytex gives you an 8% yield while you don’t get that with this. For yield hunters, Baytex is one that he would look at. He actually likes and owns both names, and they are both fine. You are probably getting a little bit more leverage in terms of the movement in oil price relative to the stock price with Baytex, where this one might be a little bit steadier being in the oil Sands space.

Growing its production, and has wonderful reserves. Even at $80 oil, he feels they are still profitable.

(A Top Pick Oct 15/13. Down 1.44%.) In all probability this could go down to the $30 level. If so, he will be there buying it.

Sell some Toronto Dominion (TD-T) and get into this? He likes TD, one of his favourite banks, and he has lots of it. He doesn’t know that he would like to sell his bank and would probably Hold them both.

This has tended to be a favourite in the US which is probably one of the reasons why it has been pounded so badly. It has a lot of heavy oil and that is where price stability is these days. Thinks it is in a Buy range here.