Opinions
Jaime Carrasco
Toscana Energy Income Corp.
TEI-T
PAST TOP PICK
Oct 16, 2015
Stock price when the opinion was issued
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This was one of the first royalty plays. Now that the pension funds have bought into the PrairieSky (PSK-T) business model, they understand the royalty play, and he thinks this will start to move. Reserve life on the proven is seven years. Yield of 11.62%. (Careful on this. They quoted a 11.62% yield a couple of times, but the Globe says it is only 3.874%. However my trading account says it is 11.86%. Check with your broker first. - Bill)
This is a royalty play, so there's hardly any management risk to it. It flows out of the ground, the government takes their royalty and this company takes its royalty. Dividend is very safe. The nice thing is that management has almost $40 million in cash that it can spend on other properties. For every $1 they have spent in the past, they have usually seen a $2 return. Yield of 13.34%.
This is the one oil company that he added to during the decline. It is a royalty model, and management has quite a bit of cash to add more properties along the way. He likes the properties and the areas. Almost 60% of production was hedged at about $100 out to December. Good management. 12% dividend yield.
He likes this because they are well hedged. At some point their hedges are going to come off and there will be a readjustment. The dividend has been quite healthy through the whole year. They have a pretty good balance sheet, so they can take advantage of acquiring more properties.
(A Top Pick Nov 12/14. Down 39.96%.) A yield of almost 20%, but they don’t have to cut it. Have great hedges right through until year end with more coming the year after. This is a royalty play, not a producer. The lifeline of all their wells is long term, not fracing. He is currently adding to this because of the dividend. Anywhere between $5.70 and $6.20 is good value.