Cardinal Energy Ltd

CJ-T

They are a formal dividend model. They cut the dividend as prices came down. They produce mainly oil. Debt is 26% of equity. They have been using cash flow to pay down debt. The financial statements look good. He thinks in the future they will go up, but in the near term they may come off. Only buy a little bit her.

(A Top Pick Sep 28/18, Down 55%) Typical for the sector as a whole. He continues to hold onto it.

Challenging. A price-taker. Along with the others, has had a negative return. Instead, something like a CN makes more sense, as it's a proxy play on oil.

A more levered up energy company. It has become historically cheap. Trades at 0.4 times book. He needs to see price momentum turn before getting in.

A small-cap heavy oil producer that has done well. For a large institutional buyer, there is just not enough liquidity. They did increase the dividend and they are buying back stock. Yield 5.8%

The basing in the stock price is similar with the energy sector as a whole. He sees a potential back to $4-$5. He does not see much correlation with the underlying commodity price.

Is a light and medium oil producer. This was a $15 stock 5 years ago. It is very cheap. Their dividend is very sustainable at $57-60 oil values. It is undervalued but there may be other opportunities elsewhere. It is an example of how the small cap companies are challenged in Canada. You probably want to invest where the money is going to go first which is not this name.

They had to cut their dividend. Book value is $6.17. It does not have enough money to reinvest. The balance sheet has a lot of debt. They are going into survival mode. When the recovery happens in perhaps Q4 this year, then this kind of company will survive and perhaps raise the dividend soon after.

He sees a bit of a bump in the shares this year. He thinks it will get to $3.50 this year. It is heavy and medium oil. It has a lot more headwinds than a light oil producer. They had to trim their dividend.

(A Top Pick Mar 08/18, Down 40%) Up to Q4 it was looking pretty good, but with differentials widening it got hammered. The stock price has not responded well since the differentials have tightened. He likes their low decline rate. They shut-in about 15% of their production. They did the prudent thing by cutting the dividend. He continues to hold it. Yield 5%.

They decided to cut the dividend until they see much better netbacks. The stock has been murdered. It’s on his watch list. It will require a lot of patience. They are in a bomb shelter right now.

They right-sized the dividend, maybe a little too early as the heavy differentials have tightened recently. It is trading at a slight discount to a Torc (TOG-T). He would sell it to take a tax loss and take on TOG-T to get a good yield and higher quality management team.

Their dividend payout is not sustainable at current levels. But correction in differential and $60 crude will keep the payout sustainable which he thinks will happen.

2 years out from now the stock should be significantly higher. They may struggle in the next quarter. They have low decline rates. Their main goal is to keep their dividend safe. If the oil differential continues longer term, then they may have to cut dividend, but it is safe in the near term. Yield = 14%