Suncor Energy Inc (SU.TO)

A cash generating machine. Will have to spend some money in the future and will eat up some of the cash that could come back to shareholders. Prefers CNQ.

He likes it longer term but would like to see great production increases which will come when oil is shipped by rail or pipeline. He would avoid it until then.

Nothing wrong with it. CNQ has been outperforming everybody. The big seniors like SU have been on the shelf recently partly because of pretty steady selling by people convinced that production of oil is going to swamp the price, like Gas going from $6 to $2. He thinks this theory is wrong. We have huge imports that we can stop. Thinks WTI will go up and beat Brent.

Feels the story is “Grow” but not at any price. This has been the case for some time. Doing a good job of transforming this. It will take a little time to see it grow, but looking at what it is free cash flowing, about $8 billion per year, no one else can compare. He would think 10% upside would be very reasonable.

Husky (HSE-T) versus Suncor (SU-T)? He wouldn’t go to either one of these if he wanted to optimize his heavy oil exposure. Both of these are in the refining business and refiners are great when crude prices are low and gasoline prices are high. Thinks we are entering a period where the inverse may potentially happen so there will be compression on the refining margins.

Came out with their guidance recently with growth not that high (about 4%). And with similar dividend it is about 8% total return. In April 2011 he advised getting out of resource and has only recently advised getting back in.

Is this a good one for a TFSA? One of the issues that you always run into with energy names is that they are cyclical in nature. You could go quite some time with a sideways movement. This would not be his top pick for a TFSA. He would rather have a non-cyclical good dividend paying company that runs smoothly with low volatility.

In a trading range. You are looking for a move above the range, which would be a buy signal.

(Market Call Minute) Buffet likes it. The defecto integrated oil sands growth. Subdued growth.

He is not that enthusiastic about any of the stocks this week. Over the last 4-5 years he sees much more cost discipline. Thinks he can get something from this big stable company.

Hasn’t owned this for quite some time. A great story once you are a bit further down the way in terms of the East-West pipeline and the potential incremental refining in Montréal, and perhaps further east. Very cheap at 5X cash flow but his current problem is that he doesn’t see much growth over the next year or 2. If it took a hit for some reason, then he would be a buyer.

If this had a bigger dividend, he’d be much happier buying it for his more conservative clients. From a volatility spectrum, it is perfect for older people that require more cash flow and capital safety.

(Market Call Minute) Peck further down the food chain with smaller cap and higher growth.

Doesn’t hold this in large amounts. Perfectly good company. Integrated. Has certainly acted reasonably well over the last little while. Has been sort of stuck in the current range as almost all the integrateds have. Thinks it will probably break out. If we get the kind of growth rates they are talking about in the US and Canada, consumption of those products will go up. Good, long-term investment.

Energy stocks here are at the higher end of the range so he would tend to want to take some money off the table. But years down the road it could be 20% higher.