Talisman Mining Ltd (TLM.TO)

They have been running on a treadmill. They need to sell assets to fund their CapX program and pay their dividend. They have some good assets and some tough assets and a lot of liabilities. High commodity prices will ensure the dividend. Not a favourite name. Still a lot of risk.

Take the money and run. North Sea oil has had the run and is now in decline. They are trying to figure out what to do with the North Sea. Sees it as dead money.

Don’t buy on the speculation of a take-out. He never owned it.

Feels the parts are worth much more than what the current share price is reflecting. Management has changed over the last 2 years. They are more focused on nearer-term profitable ventures and selling off what they consider to be more extraneous assets. They have a target of selling about another $2 billion of assets. There are rumours that Repsol is coming in looking at the company, or possibly select assets. It hasn’t really participated with a lot of the other energy companies. He is hoping to see some capital gains from here.

(Market Call Minute.) Have been tempted to Short this. He does not see Repsol coming in and buying an entity that is trading at a premium to most Canadian oils. Short reserve life and crummy assets.

A company that is still going through a refocusing effort. Leverage is still an issue. North Sea is still a tremendous drag on cash flow, and is the Achilles heel. If they could sell this part of their interests it would do wonders for the stock. You might be sitting around for quite a while because he can’t think of too many people that would want to buy such a mature asset that is bleeding cash.

This is a horrible looking chart, especially when you look at relative performance. Has been doing nothing since its decline of 2011. If you Buy you want to use $10.80 as your Exit point. There are so many other energy stocks that you could have.

They are a poor allocator of capital. There are unknown tax consequences of breaking up the company. Unless there as a visible path to cash flow growth he could not invest in it.

His model price is $5.24. That is a negative 52%.

There have been some disappointments with this company with its production in the North Sea. Stock is down, which is unusual for an oil/gas stock in the last year. Sold half their North Sea exposure to a Chinese oil company.

We are out of the seasonal strength period for energy, so you might want to be a little cautious on this sector. On this chart, the one low is a little higher than the last one, but the most recent high was lower than the last one.

(Market Call Minute.) Trying to refocus so are selling off their asset portfolio in order to focus on certain areas. Feels there are more attractive energy plays out there.

Has been treading water for quite some time. New CEO brought in to turn company around. They had assets everywhere and it became unmanageable. He will sell off assets or part of the company and maybe someone will eventually come along and buy the remainder of the company. 2.5% yield. Eventually the market will realize this is a really good company.

We’ve seen a continual turnover of management. It is continually restructuring. He has stayed away from it.

They are trying to restructure it, sell some assets. They have to start generating more cash flow. As they restructure, he thinks they will start to focus again on core areas.