Tourmaline Oil Corp (TOU.TO)

Not a core position for her, though some clients own it in their accounts. Stock's been quite volatile. Strong free cashflow, low debt. Secondary offering of $200M of TPZ shares recently is a positive. Street's price target is ~$67-77. Forward PE of 11x suggests it's undervalued. Potential infrastructure expansion could drive future growth. 

Has done well despite commodity price volatility. Trading below 50-day and 200-day MAs, RSI is near neutral. Support around $59. Insiders are really accumulating, as are institutions. Attractive for value investors.

She prefers CNQ and ENB.

Likes this one. Access to 3-4 different markets in NA, which means they can sell into any of those and control prices that way.

Nice dividend, in his dividend growers mandate. Also pays special dividends -- this lets it not be beholden to a super-high dividend, but also honour commitment to return capital to shareholders. A more ambitious capex program might throttle back some of those special dividends, but this company is very good at capital deployment.

Alberta nat gas is the lowest cost to produce. Prolific resources. Biggest nat gas producer in Canada. LNG Canada had some growing pains, but those will get ironed out -- that's the ticket to accessing higher-priced markets, and more facilities are on the drawing board. Long-term outlook for the group is pretty rosy.

Natural gas prices in Western Canada have not been great. Huge position in the Montney in BC, and it's only about 5% drilled out. What he's hoping for is flattening or decline in US production, plus huge demand from LNG. This would tip the supply/demand imbalance toward the supply side and move prices higher.

At that time, TOU will be printing money. Till then, it's just a waiting game for the price to turn as you collect a nice dividend.

(Note the short timeframe.)  He's been legging in a bit at a time for the better part of a year. If you look at a 3-year chart, you can see the swing pattern for trading. You can buy it somewhere near $60, and sell it somewhere near $69-70. 

Eventually, it'll break out. His team has a longer-term perspective on this name, so they haven't been selling at the peak. (Sees nat gas as bullish for next 3-5 years.) But they do buy 1-2% when it's troughing ~$60.

Gas is priced regionally, where it's produced. TOU is good at getting gas to other hubs to secure better pricing, but the Alberta market has not played out as expected. There's a storage glut, but turnaround time for processing at LNG Canada is starting to come down. He owns it for a longer-term structural play. Wouldn't worry about these bumps.

Largest position in his firm's "dark horse" fund, which is a Canadian small-cap fund. Stock price has been somewhat weak over last number of months, partly due to nat gas prices pulling back. Investors have also been conditioned to expect the return of lots of cash from energy companies, and they balk when a company wants to spend some of it. 

This pressure on the stock price gives him the chance to get involved in the name. The CEO is one of a dozen you can count on to do the right thing for shareholders. Lots of natural-gas-demand tailwinds. Phenomenal balance sheet. Cheap for what he expects to be a high probability of delivering results. Yield is 3.36%.

Very strong management. Largest natural gas producer, along with CNQ. Has to do M&A to fund its growth plan. Nat gas prices have suffered. LNG projects still ramping up. There's a gas name she prefers a bit more, and it already has a lot of reserves in inventory.

If you already own it, hold. For new $$, see her Top Picks.

Core holding. Largest nat gas producer in Canada, most assets in Western Canada. Q2 was fine, but company intends to spend more on infrastructure (absolutely the right thing to do for the long-term health of the company). Nat gas prices are low in Canada right now. Able to sell to US and other markets with the new LNG terminal.

Dividend and special dividends, even with low gas prices. Outstanding management. He's not impatient with this one.

Drifting. At $60, just above support of $56 that it bounced off of in 2023. Resistance around $65 and then $70. Stabilizing, but not really going anywhere.

Spooked the market a bit in terms of production spend, so stock came down. Company's trying to time production increase to coincide with the growing LNG business. Natural gas is needed for years to come -- cleaner energy, plus a bridge to the future. Largest nat gas guys in Canada. 

Prices have been depressed, but he sees very strong pricing (relatively speaking) in 2026. Meantime, you get a decent dividend while you wait. Sometimes has special dividends. Trades ~6.6x EV, in line with the group, for 9% production growth and 5% cashflow growth. Should work very well over the next 5 years. Yield is 3.17%.

He has a small position. Chart shows basing since 2023. Thinks it will do quite well for investors; as to when, he's not sure. Great balance sheet. Well run, and he's convinced it'll be taken out one day. So hold on and get rewarded someday. 

If it breaks below $50 or so, will probably end up around $40-45.

It sold off because it is being punished by short term investors for long term thinking. It is increasing its capex for the next five years which will result in accelerating cash flow in 2030 and 2031. Investors want companies to return capital to shareholders now but not much has been happening with many of them. Tourmaline has strong management so you could step in for the long term. It has been able to grow and return capital to shareholders but it will be less now with the increased capex.

Temperatures are starting to moderate, and nat gas prices are down. Overproduction in US. Ramp-up of LNG Canada slower than expected, but should be picking up. 

She's actually buying more ARX for clients, not trimming. Embedded growth via inventory through reserves. Likes that a lot of its prices are hedged to higher international gas prices (instead of Canadian). Doesn't need to acquire to fund growth, whereas TOU does.

If she were going to own 2 names, she would also own TOU. But she doesn't. ARX is first in the pecking order. If you have the patience perhaps hold onto TOU a bit longer, as we are getting into the colder months.

It pays a high dividend plus a special one. It surprised after announcing it would reduce cash flow paid to shareholders so that they can grow the business. Is undervalued.