Surge Energy Inc

Chart shows a nice, long base, although there are some pretty big price moves in it. You don’t want to see it go below $1.50. If it got above $3, it could move pretty substantially. Indicators are kind of low, not telling us a heck of a lot, meaning this is probably not going to want to move until it breaks out of $2.30. And again at $3 you are going to get a big move out of it.

It is mostly an oily company. They just announced an acquisition, increasing production. He likes this one. If you saw it under $2 you are looking at a decent dividend about 4%. He likes management. The balance sheet is in good shape. It is a value name growing at a nice steady pace.

(Top Pick Sep 6/16, Down 12%) They have three major core areas and 12k BOEs. It has a 4.5% monthly yield. It would be a great buy for the yield. Management is focused on shareholder value.

There are other names he would want to own ahead of this. If looking for yield, he would be comfortable buying Torc (TOG-T). If looking for production growth in Canada, he would favour Spartan (SPE-T).

They’ve been showing good discipline and right sizing their portfolio. Reduced debt from $450 million in mid-2014 to about $200 million. Has a much better balance sheet. Probably has a 15% rate of growth in an environment where oil is $50-$55. Dividend yield of 4.5%. (Analysts’ price target of $3.)

This is a company he really likes. They did 13,800 BOE’s a day in Q1. The balance sheet is in very good shape. BV is $3.48. Very cheap on all the value metrics. If we see the price of oil go down, this could come down below $2. It has a very nice dividend. A table pounding buy under $1.80. He has a 12-month target for the end of 2018 of $3.70.

(Market Call Minute.) They are doing a lot of the right things, but unfortunately their debt to cash flow is just way too high.

(A Top Pick Sept 6/16. Down 7%.) For investors going forward, this is a stock that is going to work out very well. 4.6% annual yield.

The balance sheet is in good shape with $181 million of debt against $784 million of equity. This potentially could be an $8 stock in the next bull market. Dividend yield of 4.4%. (Analysts’ price target is $3.63.)

A decent company, but some of their NETBACKS haven’t been as strong as some of their peers. There is a little bit of pencil sharpening to do. Their decline rate is roughly 23%, so that is negative.

He wouldn’t own this. Doesn’t have an utter conviction in management. Trades at a discount multiple relative to its peers, but would suggest that some of that has been through poorish execution over the past couple of years. There was also an over reliance on debt, which they’ve done a good job of paying down. There is lingering concern about inventory at one of their key growth plays. It’s fine, but there are other names he would prefer.

Sees energy being very much range bound. OPEC and the major producers are pulling back in production, but there has been so much competition lately from shale drilling, and that has kept a limit on price. Sees more risk to the downside than to the upside.

(Top Pick Sep 6/16, Up 36.60%) They had wells that just came on and they have now revised their numbers upward. It seems fully valued to him right now. The fourth quarter results will be out in a number of months and if the price of crude backs off then he would be looking at this a lot more constructively.

This has taken a bit of a pounding over the last couple of years, but has been going up quite nicely this year. The main seasonal period where energy does well is from February 25 to May 9. That is because of supply imbalances that happen. He starts to look a month before hand, starting in January. The chart shows a bit of an ascending triangle, which is bullish.

(Market Call Minute.) Very little institutional following at this point, although recent results have been good.