Suncor Energy Inc (SU.TO)

Quality company. Is a champion in Canada. What they need is a higher oil price, as they all do. Nothing wrong with it. Buy in $30 range. Trade into mid-30s. Years out, fracking will have an impact on energy prices. We may have a lot more energy than we think we have.

Has a lot of oil sands interest, which have a fixed cost aspect. If you can’t move your product out of Alberta at a price that is reasonably close to the WT I, your margins are squeezed.

(A Top Pick Dec 28/11. Up 14.37%.) Still has decent growth. He feels valuation is inexpensive. Still likes.

Best managed and the biggest. Managed to digest Petrocan and get rid of a lot of the bits they didn’t want. Very profitable and successful but is the proxy for Canadian integrated producers and, at the moment, that is not where people want to be. He believes that will close over the next 1 to 1.5 years.

You want to be a trader, because of the downgrade of the sector for a couple of years. $28ish is good value. You won’t make money if you just buy and hold.

Management is planning on growing the business to be profitable. Return on assets, return on capital and return on equity is to become a core discipline at the company.

Company has been hit by the high and variable costs of the oil sands. It traded at around $23 in 2011. BV is around $26.20 at the end of Q3. Any time you see the stock below BV, it is a fabulous Buy. He would use a low $30 target for the next 6 months.

(Top Pick July 6/11, Up 9.09%) Still owns it. It is probably the most undervalued of the integrateds. Costs are in line and everything is working out for them. It is really basing in there.

(Top Pick Dec 2/11, Up 9.84%)

1.6% yield. A dividend grower. Low decline rates and does not have to spend a lot of capital to keep its production flat. Expects significant capital gains.

Issue is the price they are getting for oil and the cost of the oil sands if very expensive. Difficult for these companies and something has to give.

Offers compelling value. Canada’s largest integrated oil company. Downstream operations are doing very well. Doing well on the retail side. They are a very strong generator of cash flow. Production profile over the next few years indicates significant growth.

Have very rich refining margins. Very resistant to falling oil prices. Pretty cheap at around 5X enterprise value to discounted adjusted cash flow. Doing a great job of focusing on shareholder value. Just boosted their dividend, huge shareholder buyback, new religion in cost control. Wouldn’t buy more because regardless of who wins in the US election, there will be steadily more oil being produced over the next number of years. (See Top Picks.)

Has been tremendously volatile. You have to trade energy stocks. With oil prices pulling back a lot of stocks have NOT pulled back, so maybe we are okay. Oil prices may bounce back over the next three months and then take some money off the table.

(A Top Pick Oct 24/11. Up 12.61%.) Big integrated oil companies are benefiting greatly from their refining and marketing operations. Profitability is going up.