Tourmaline Oil Corp (TOU.TO)

There are times in the year when this company sells off and we are not in that environment right now. Company is executing spectacularly.

Although they are growing their oil side, their main focus is on natural gas. They are the low cost producer so if there is a decline in natural gas prices, all of their projects are still profitable. Management team is exceptional and very shrewd. Strong experience in building companies of size and acquiring and building acreage better than others.

More of a natural gas story than an oil story. If the index comes down it is one that is a high value, high multiple and a premier story. When there was a correction in 2011-2012, the stock did get hit down to the $20 level. Stock will come down $4-$5 and at that point it would probably be a good buy. It will never be cheap. Take advantage of any market malaise in the next few months.

About 80% natural gas. Management was in a private shelf which gave them the advantage of buying a lot of acreage in some of the very best areas of Alberta. Recently down about 10% along with other natural gas names due to short-term weakness. Really compelling especially if you can average down over the next few weeks. Trading at around 9X 2014 cash flow compared to 12-14 times in the past.

(Top Pick Oct 26/12, Up 18.31%) Could have been a top pick again. Low cost producer. Wishes they had a dividend. They own the biggest land position in the deep basin so would be attractive to a larger company that needed land.

Bellwether company in its peer group. One of the largest intermediates. A growth profile 4 or 5 times its peer group. Risk is that it has some exposure to Nat Gas. He is pessimistic short term on Nat Gas.

Have enormous running room. Trading at the lowest multiple that he has seen, roughly 8X enterprise value to cash flow. Have multi-decades worth of profitable inventory. Could be a $50 stock sometime next year. Bulletproof balance sheet.

(A Top Pick June 20/12. Up 77.56%.) Just announced some great news in that they are increasing their exposure to the Spirit River area as well as giving new guidance for 2014 production where they are looking at 105,000-110,000 barrels a day.

(Top Pick Jun 21/12, Up 69.56%)

What should retail investors pay attention to or ask questions about at their annual meeting next week? You should ask them when they are going to sell the company. They’ve done a great job and this is one of the best performing stocks. They can continue to grow the company for several more years. His view is that the company does get sold at some point in time in the next year or so.

Management has assembled an unparalleled asset base. You are paying for quality. Pristine balance sheet.

(Top Pick Oct 26/12, Up 12.80%)

(Top Pick Apr 19/12, Up 105.86%) The premier gas name in the western Canada basin. Very well aligned with shareholders. Continuing to delineate a sizeable resource on their lands. The scale of their asset would appeal to a company that is looking for resource.

(Top Pick Jun 21/12, Up 60.20%) Thinks this company can duplicate what it did in the last year. Should be able to increase production by 35% per share by next year. Reserves grew 50% per share last year. Top tier management team. This is the go-to name for good gas leverage. You could see 10-15% downside due to execution or gas prices. You could pick your moment, but if you are a long term holder in a rising gas price market, takeovers start to creep in and we would not be surprised to see it go within the next year.

Gas liquids. Just reported super earnings. Expects it will eventually get taken out. Brilliant management which continues to outperform in Alberta Deep Basin. His target would be mid-$50.