Shell Canada

SHC-T

(A Top Pick Aug 5/05. Down 3.2%.) Valuation looks pretty good. Sourcing of the profit growth looks pretty good. ROE is deteriorating. Sold his holdings.

Model price is $39.07 which is a -1% differential. Made his money on this company and moved on back in October. Dead money going forwards.

They are blowing their brains out on the costs of their oil sands project. This is why they have under performed the rest of the market. Prefers others.

The upward trend line was violated in April. Once you break a trend line, the Up is over.

A great company. Multiple is a little high. Good mix of product.

The way oil stocks came off their lows in May has been very impressive. Also crude oil has acted very impressively. Feels there is another leg higher.

In the integrateds in Canada, this is the weakest company. Costs have gone out of control on their oil sands project. When gasoline margins were sky-high, they had problems with their Montréal refinery.

Not going anywhere because there is no news to drive the stock. Nothing wrong with this company.

If you're looking for a large cap name that is integrated, he would suggest Imperial Oil (IMO-T) or Petro Canada (PCA-T). Nothing wrong with it, it just has a higher valuation than any of them.

A great company. He looks for companies that make higher highs in each successive leg of the bull market. This hasn't happened with this company.

Their largest play is the Athabascan oil play. Have brought production costs down to $22/23 a barrel. No debt and very strong balance sheet. Has fairly high valuation, but there are good reasons for it.

Affiliated with some of the oil sands. Has good prospects. Has had a good run. A little more pricey. Prefers CNQ (CNQ-T), Talisman (TLM-T) or Petro Canada (PCA-T).

Not at good stock to add at this point. Sell.

He would be switching from this to Imperial Oil (IMO-T). It got a lot of momentum behind it because of its oil sands and a possible takeover by its parent. This has now become overpriced.

The oil sands is the best natural asset in the world. As a long-term hold and a way to keep some holdings in the oil sands, this is a good company to have. May be a little rich at this point.