Suncor Energy Inc (SU.TO)

If oil gets knocked down even more, he would look to buy it. This is a quality company and you need quality in this oil environment. A well run company.

3 to 5 year hold? He would see lots of growth over that length of time and it is a good idea to invest with that time horizon in mind. This company has long reserves and a lot of optionality in terms of its property as well as a lot of growth. With this long-term horizon, you can’t go wrong.

He is a big believer in this one. A good way to play the oil patch from an integrated perspective. You have everything from conventional oil sands to upstream and downstream. Extremely well-managed. On the multiple pieces, it looks pretty reasonable at these levels. If you look out over the next year or 2, it is selling at around 6X cash flow and 10-12 times earnings, which is quite reasonable. Because it is in the energy sector, there might be some volatility in the short term.

If you want to own a large cap name in Canada, the energy sector is representing good value here. He has quite a bit of energy exposure, although he doesn’t own this one. If you want to own a large cap major, this would be the one. Likes what management is doing. They are paying attention and focusing on cost of capital. They’re not just pursuing growth for the sake of growth. They are buying back their stock when they think that they can't make investments in industries. Global supply is about 93 million barrels a day and global demand is about 93 million barrels a day. They are both growing at about 1.5%. There has been a downtick in growth recently. The large cap oil sands producers have been pursuing these large-scale mining operations and this company has done an excellent job of doing it. Reasonably expensive barrels of oil, and they run for long, long periods of time.

If he is looking to play the oil game and something that doesn't have a lot of risk to it, he is going to pick a company like this. He likes the downstream, the refining and the whole thing. Also, this is an oil sands company, so they don't have to go out to find the oil. A very conservative play, but if you want to get your feet wet in the oil business at present oil prices, this would be the one to buy. Thinks this has some support at around $38.

Stock vs. Stock. SU-T vs. TOU-T. Gas will have more volatility than oil. SU-T he owns and it is the better choice. Out a year or two it won’t have much growth. Will trade down to the mid-$30s next year and up as high as last summer’s high. Partially sell if it gets to the mid $40s.

Prefers Whitecap Resources (WCP-T), which is hedged at around $98, and half of 2015 production is hedged well into the high $90. You have exposure on this if the oil price keeps dropping. Great balance sheet, cash flow and long reserve life, but it wouldn't be his 1st choice.

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.