Vermilion Energy Inc (VET.TO)

They stole the Spartan assets. They are already trading at a premium relative to their peers, so it is not going to give the greatest return in the upcoming oil rally.

They acquired Spartan Energy, which gives them a low-cost Saskatchewan producer and a lot of light oil, which is easy to move. Their balance sheet has improved significantly. They had $1.36 billion in debt with $1.57 in equity. That’s a tight balance sheet. After the acquisition, which was an all-stock deal, they’ll have $1.5 billion of debt against $2.8 billion in equity. This gives them more oil in Canada and a much better balance sheet. He thinks this is an interesting story, the price has come down and thinks it is a good value if it breaks below $40. Spartan was a good buy for them and the next buys will probably be international.

This does not have great leverage to the oil price. This is a classic, well run, good operators company. It is not going to give you the big play to oil. They run the company as a shareholder friendly company, however.

He is looking at Vermillion in its role as the buyer of Spartan Energy. He thinks Vermillion is well run and gives the benefit of international exposure. They have a strong enough balance sheet and they have made the dividend more sustainable. Spartan is being sold to VET at a cheap valuation. This is a very high quality company that he wouldn’t own because it trades at a high multiple. He believes that the market is approaching an inflection point in sentiment, that will have a much bigger impact on the well-run companies that are not liked as much as Vermillion.

Probably one of the most geographically diversified oil and gas companies we have. It pays a generous dividend. He thought the stock would have reacted more positively with today's acquisition announcement. He thinks the acquisition will be very accretive. (Analysts’ target: $52.80).

The whole energy patch pulled back today. Crude oil prices ran up last week due to Syria crisis. She doesn't own much energy now, but would look at this one. She likes their international exposure, particularly to Brent oil prices. They bought Spartan relatively cheap last week.

Likes this. Always has. They have non-Canadian assets in Europe--he likes this. Just increased the dividend, too. A good one to own. Solid management. 6.7% dividend.

(A Top Pick Jan 8/18, Down 10.91%) The chart for oil looks constructive but the energy sector here in Canada has not been that good. He has 3 energy stocks that he is giving another month to until the seasonal period ends and then he is out. He is holding for the seasonal period to give it a boost.

This company has a nice dividend and the book value is $12.33, but is a little heavy on debt. A back off into the high-$30s would be a good buy on a 3-5 year view. He thinks the dividend is safe. Yield 6.4%.

It's held up better than most. CEO is well-regarded. That said, he wouldn't buy this now. We're in an oil bull market and he'd rather own an oil name that has been absolutely cast aside before a Canadian oil market bounce-back occurs, but Vermillion is not one of these names.

(A Top Pick Jun 27/16, Up 0.24%) The oil price is up 10% since then, so this is surprising. He would be looking at it at these levels.

He is not a fan of the energy sector currently. It continues to strike him how poorly this sector is preforming relative to the commodity price. He would look elsewhere than the energy sector. Yield %. (Analysts’ price target is $ )

Good quality name. The payout ratio is 109% compared to 124% for the peer group. They just made an acquisition that seems accretive. The balance sheet seems a little vulnerable. All in if you are neutral in energy, it is a trade. (Analysts’ price target is $54)

VET-T vs. SU-T. He would more toward SU-T because it is longer term and you get a higher discount. His money has gone toward the drillers recently.

Distribution is pretty high. The balance sheet is a bit stretched. They have an income stream from Europe and Australia as well as the US. Canada is their biggest income stream.