Crescent Point Energy Corp

It has never been a favorite. The company has grown but the debt position has also. If the sector rallies then it will move but otherwise there is a lot of stock and high debt.

(A Top Pick Jan 04/19, Up 37%) He recommended it at a low point last year. Today, it moved well. He strictly trades this stock and is not in it right now. However, he has made 30%-50% trading it in the past. He's getting his feet back into energy but he would prefer other names.

You can take profits now and re-buy later. WTI oil will likely see weakness. Big resistance at $6, so you can take some profits now. He predicts a general market pullback in January. He predicts a 10-15% pullback in CPG, but he likes the 2002-2021 outlook for CPG and oil.

A lot of the stocks are trading substantially below book values. They are in North Dakota and Southern Saskatchewan. They have been buying back their stocks. The dividend has been cut but the stock has been acting well.

They have been buying back stock and sold mid-stream assets. It is trading at 18% free cash flow yield. It is 2.7 times enterprise value to cash flow, which is staggering considering multiple compression. They are not as exposed to pipeline bottlenecks as others. (Analysts’ price target is $7.40)

He would not buy any E&P companies right now. You need a rally in the commodity price to get people excited. Companies are just paying down debt and buying back stock, but that won't get any attention. Look elsewhere.

(A Top Pick Dec 31/18, Up 20%) He still likes it. They did wrong things in the past--issuing alot of equity--but are doing the right things now--share buybacks and selling off assets. These please shareholders, not production growth. CPG just sold its infrastructure assets last month at 7x, but the stock is trading at 3x. The balance sheet is now 2x debt-to-EBITDA.

They are well-positioned, what he wants an energy company to do. Forget about growing production, but rather get out of residual assets, improving their balance sheet and buying back shares. They're doing the opposite of what they did for years--issuing equity which drowned out valuation. They finally listened to shareholders and have reversed course. Great value at 3x operating cash flow. They just sold off infrastructure assets in Utah at 8x. Free cash flow yield is nearly 20%, which is great value. (Analysts’ price target is $7.40)

They just announced a sale of mid-stream operations in mid-Saskatchewan. An infrastructure deal will knock the debt down when it closes in Q1. They will continue to be able to pay down debt. His target is $7.50-$8.

The new CEO has payed down debt, rationalized assets and bought back stock. They are now monetizing assets at 10 times cash flow when the company is only trading at 2.8 times. All good things. If it traded back to 5 times cash flow, its share price would rise 100%.

Oil prices? He doesn't have an oil price forecast. CPG is like a lot of other companies -- divesting assets and paying down debt. He thinks Canadian equities are dead in the water here and does not know what catalyst will help change things.

They are buying back stocks and breaking the trend of issuing more equity and growing. They have decent light oil, strong production and good cash flow generation. The energy sector risk is there, but it is a good buy among them.

They're paying down debt and buying back shares. He still doesn't like this stock or Canadian oil stocks. Wait longer. They report in November. He hopes the balance sheet looks better.

$10 in a year? They have under gone a management change and he likes the new team. They have sold assets, reduced operational costs, and maximizing cash flow to buy back stock. He would like to see them be more aggressive on the buyback next year. The stock trades at 3 times cash flow and at 74% of their liquidation value -- incredibly cheap. They plan to monetize some of their infrastructure and are buying back $100 million in shares by year end. He would like to see them buy back 10-15% of their shares next year to improve all metrics, while not foolishly production. Back to $10 would require a multiple of 5 times cash flow -- he is optimistic.