Suncor Energy Inc (SU.TO)

Like many other large Canadian oil/gas companies has suffered from weaker differentials, concerns over costs in the oil sands, general concern that oil prices are going to go lower. With a huge change in technology that we have seen in the oil/gas business, all of the previous assumptions about supply and resources available in North America and the issue of Peak Oil is being at bit debunked by the new technology.

Oil. Historically Oil and Nat Gas have been liked but have recently diversified. When they get the LNG thing and we can transport gas, it is a local thing so the price will stay there for a couple of years. $85 is big support for oil and we will see it tested in the next couple of weeks. Local integrated oil SU-T is attractive now and he picked some up.

Great assets. Likes that they did not proceed with Voyager, which makes more room for dividend increases. They were already generating a ton of free cash flow so they have room for dividend increases. With all the political issues, there is a lot of overhang on the shares. Next quarter is going to be a good indicator for him. Wildly cheap so once some of the negative sentiment gets removed, it will have room to run.

Stock has been very, very weak. Trading at a significant discount (20%-30%) to his estimated NAV. He is buying this for a valuation call. Expects to see dividends increase at the annual general meeting on April 30. The real big thing would be a favourable Keystone outcome. Yield of 1.72%.

(Market Call Minute.) Good oil sands operator and as differentials start to narrow it will give good leverage to higher prices..

(A Top Pick May 17/12. Up 6.88%.) Continue to perform well and produce over 550,000 barrels per day. Have capital discipline in that they shut down their Voyager program. 95% of their production is priced out of Brent pricing. Dividend of about 1.8% and there is room to grow that.

All these oil stocks are struggling right now. The seasonal guys will tell you it should do well this time of year. SU broke some pretty important support and next level is mid-$20s.

Slide over to a pipeline or going to an energy company that has a little more performance? Pipeline company is a great asset to own but they have run up a lot so if you make the switch, you are buying a much higher valued stock. Feels that oil is going up and that the differential in Canada is correcting.

Risk/reward isn’t bad. Wouldn’t be his 1^st choice in oil companies. Had more bad news today where they announced another write-off on Voyager. Still too many headwinds. The differential is not acting in their favour.

We don’t have enough capacity in Canada to ship our oil and gas. We are stranded and getting discounted which is reflected in this company. Foreigners have no interest in buying our oil companies. We will get there, but it is going to take 3 to 5 years before there is sufficient capacity to get the oil and gas out. She would prefer owning the pipeline companies and infrastructure as we continue to solve the issues.

Should they sell their holdings and move to a US oil or get out of the sector altogether? He wouldn’t get out of the sector altogether. Yield is low. Big company so no one is going to take it over. There won’t be much internal growth out of this.

We are getting half the world price for oil. There is a lot of activity under way. Be patient for another 12 months.

The dominant oil company in Canada fully integrated. Doing fine in refining spreads. They are dominant in oil sands and retail distribution. Looking forward, under 5 times cash flow, under 10 times earnings, you could see pretty good appreciation.

Well-run company. Current disenchantment is over the Voyager upgrader and that looks like it may well be scrapped along with a fair bit of change. This is on his potential Buy list

There is a big discount on oil and operational costs are high. Because of this, a lot of investors would prefer to own the infrastructure companies rather than the producers. Trading below the 200 day moving average. We are in a strong market and the energy patch does not appear to be the place to focus.