This week’s new 52-week lows… (Dec 12-18)

One of the worst energy names. The CEO and board did one of the word acquisitions in history. When the market wanted natural gas, they added liquids exposure. Are the worst-performing nat gas stock in North America. No upside. An activist has put members on the board.

Debt concerns? BXE took bankruptcy protection when debt became too much. There is no equity value in it any longer. Companies that have debt that matures in 2020 or 2021 will have issues. He sees no issues with BIR or TVE on this topic. The new Federal relief program for large companies may be difficult…

It is a liquids rich player with very high liquids content. The problem is that the market cap is below the radar, and the debt is high. It was a $4 plus stock when we had decent gas prices. They are looking to bring their debt down. He thinks the company will survive. They've been…

HSE-T + CVE-T: Stay after the merger? He does not own either one. He understands the merger makes sense. There are a lot of cost savings that can be found. He prefers CNQ-T, PXT-T and one of his Top Picks today. He prefers these to HSE-T. If the sector bounces back you could get an…

Grown by acquisition quite steadily over the years. Very good company and it won't hurt you, but he owns TFII instead.

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research EPS of 39c slightly beat estimates; revenue of $310M was 1% short of estimates. EBITDA of $502M was much higher than expected. Capex is still seen at $450M to $500M. Production of 133,426 b/d beat estimates of 132,943 b/d. Production rose 11%. Consensus calls for…

Pengrowth (PGF-T) and Perpetual (PMT-T)? Had some challenges with their balance sheet over the last couple of years with the collapse in oil prices. This one would be a little riskier. If you really see a big jump in commodity prices, this probably has a lot more upside than Pengrowth (PGF-T).

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research QEC is a very small oil and gas company with market cap at $94.27M. QEC had a flat year in terms of price in 2023 but did display some volatility. Both revenues and net income margins had negative growth in Q3. The balance sheet looks…

Owns shares. Believes company has a lot of potential. European gas prices have been low, but still relatively strong. Largest independent gas producer in all of Europe. Very good shareholder discipline - has paid lots of dividends. Good capital allocation. 

The company is very cheap in terms of price to book. Their book value was $4 at the end of June. However, they have a debt problem: $211 million of debt compared to an equity value of $369 million. He sees this as a takeover candidate especially now because he is seeing consolidation in the…

(A Top Pick Aug 13/18, Down 61%) They disenfranchised the Canadian shareholders. He sold out sooner before the de listing, so did not do as badly, nor did his subscribers. He disagrees with their move.

(A Top Pick Nov 25/24, Down 2%) (Note the short timeframe.)  Energy's been under a bit of pressure lately. Still nothing wrong with the chart. Could pull back a bit more, but the trend is up. Great company. Fundamentally, one of the best. 

Buy any dip. They will modestly grow production over 5 years and buy 68% of shares at the current oil price; at $80 they could almost privatize. At $70 oil in 5 years, they will free cash flow at the current share price. Has 50 years of stay-flat inventory. At flat oil, will go from…

(A Top Pick Jan 07/25, Down 9.1%)Stockchase Research Editor: Michael O’Reilly Our PAST TOP PICK with BDI has triggered its stop at $8.50.  To remain disciplined, we recommend covering the position at this time.  This will result in a net investment loss of 8%, when combined with our previous guidance.  

It is suffering much more than energy stocks in general. If it breaks $6 then buy for a swing trade.

(A Top Pick Apr 02/24, Down 45%) They executed in their drilling. There's been huge multiple contraction among small/mid-caps. He exited around $3.85-3.90. Shares are in an air pocket now, falling on no natural buyers (energy is out of favour). Stock is cheap, given cash flow. They pay half that cash to buy back shares.…

Oilfield services firm that has big fracturing technology presence. Horizontal drilling and shale boom not as strong. Very dependent on energy prices. Lots of assets that must be carried on the books. Not investing at this time. 

Bought at $8.50, now at $6.64. Sentiment remains challenged in the space (a common theme today), even though the Energy Index is up about 20% YTD. People are hiding in large caps, with few funds coming to small- or mid-caps. Hard to see it outperforming. Yield is 10.7%, pretty hard to replace. Not a name…

They have cut back and preserved capital. They do not have a debt issue. They are a gas play. If gas prices stay strong, they should do well. She anticipates their 4th quarter production being lower. She is not buying it today, but the future looks good.

They did a flow through share. The company is involved in oil and Nat. gas. He has a $1.20 target on it. If they can generate more cash flow they can get the debt down. He likes it. He may add on weakness.

Some people own it for M&A takeover potential. He doesn't like to do that. It's a market where interest in small caps remains very low. Not hitting enough radar screens currently. Pursuing growth, so more modest cashflow. 

Just beat earnings and have increased production. Cheap valuation compared to peers. But it's getting more expensive heading into 2021. There's no growth here, but that goes with the entire oil patch. The real issue is will they survive. Their balance sheet is getting better, but still high for a blue-chip name. You'll be saved…

He stayed away because they went to the states to make acquisitions. He did not know why the Americans would not already take these assets. He stays away from it.

Its takeover by a bigger player should attract institutional players, and should lead to a rerating. He's been buying the parent company CHRD, now a full position of 4%. Deepest inventory in the area of any producer.

One of the largest fleets of generation 3 and 4 deeper coil tubing. Two businesses: coil tubing and tools. Both are being run efficiently. Margin pressure in the sector. Great little story that will be a big beneficiary of LNG drilling. No debt. 5-year bull market target of $3. 2023 will be a pivotal year…

Expecting merger with NextGen. Will continue to own shares. Large deposits of Uranium. Very bullish on upside for company. 

Support level around $13 was broken. Not great news from his viewpoint. He'd want to know if the company is stable enough to continue paying the dividend. If yes, it'll probably move up again.

Company share price is reflective of lack in interest in small energy names (market cap too small). Company needs to sell itself in order to generate value. Better options for investors out there. 

A mico-cap that had some major issues. He would not look at this at all.

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research IPO is a small cap oil and gas company. It is down about 10% over the last year, but has been trending up year-to-date. IPO also pays out a high yield at 7.7% and is cheap on a forward price-to-earnings basis at 7.6x. Revenues have…

It is quite a small company. It is hugely volatile. There a lot of problems over the years with the pricing of data coming from India regarding a 10% stake in another company. They have too much debt. The price of the gas they sell has been negotiated. A tough name to predict.

Not a good investment with current management team. Other energy companies available with better opportunities.

(A Top Pick Apr 02/24, Down 32%) He exited at a profit. Services have been selling off when gas/oil was recently weak. The problem is that drillers have gotten too efficient. That said, this is looking tempting, trading at 3x EBITDA and 32% free cash flow yield.

He's bullish on natural gas for next year, though not now because of bloated storage and too-high US production. Suffers from challenges of a smaller company, just not hitting the radar screens. See his Top Picks.

Has nat gas exposure--and he's bearish on all nat gas stocks. Market cap is way too low for investors to really care for in this sector.

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. STEP is down 35% this year, but up 59% in 52-weeks. Profit taking is probably part of the issue here. It did beat estimates in the 4Q, but the sector has been quite weak, and the company has recently seen two downgrades by brokers. EPS is supposed…

Has done a great job of taking market focus off of Base Plant mine depletion down the road. It trades at a slight premium to Cenovus, which SU could buy, but he hopes not.

Has held up well at 8x PE, even with nat gas prices low. Pristine balance sheet, using it to invest in equipment that reduces carbon footprint, which gives it a marketing advantage. One of the more volatile among the service companies. Yield is 3-4%.

(A Top Pick Nov 20/21, Up 69%) Liked it for assets. Ultimately sold to Whitecap.

Cold winter weather has been good for nat gas prices. Wild card is AI demand -- what's the sustainable fuel that can keep data centres running 24/7? It's natural gas. Over the next few years, a fortune will be spent building data centres. Hopefully, with new administration in Canada, this name can benefit from the…

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research EPS of $0.11 missed estimates of $0.13 and revenues of $42.41M missed estimates of $44M. Its FFO increased by 29% against the previous quarter, and its operational efficiency improved by 3% in average production. It demonstrated drilling cost reductions in the quarter, however, against the…

It's been stuck at these levels for a long time, but likes recent volumes. No problem buying this one.

Forestry space He owns no names. The stocks are okay but face trade disputes and an economic slowdown that will hit housing stocks. The stocks have been beaten up.

Homebuilding stocks in the US have been going straight up, but Canadian forestry stocks have been going the other way. WFG has done the best in holding its share price.IFP and CFP have really started to bottom on the charts. He hasn't done enough digging to know who has a better earnings profile. But looking…

Has an old mine outside of Los Angeles that was run in the 1930s. Closed down during the Second World War and they are doing open pit mining in the area. Has some issues, but at these gold prices, it will probably start to work again. Under followed. Highly speculative.

The company has suspended its dividend. They operate diamond mines in South Africa. They are looking into underground, from open pit. The cost is more expensive than thought. The price of diamonds has been reduced, though retail prices won’t change.

Agnico-Eagle (AEM-T) came in a while ago and made a 9.9% stake in this company. The stock went up, but it really hasn’t done much since then. Then Barrick (ABX-T) came in and said they really liked the deposit and wanted to do a joint venture. This is a much better approach that is better…

Likes the managers, but concerned with the topography. A decent-sized gold project. A good speculation.

(Top Pick Mar 8/11, Down 65.85%)

Ranked as a 4 in his system, which is high praise. Holds management team in high regard. Wonderful asset allocators and patient investors. Recently entered into royalties for renewable energy.

Wallbridge Mining to buy Balmoral It depends on your timeframe--some will take the premium in Balmoral and grab the profit. He expects in two years that the deal will benefit shareholders with lower costs. The Abitibi is a great gold district. If he owned this, he'd hang onto it.

Just completed an expansion. A bit more debt leveraged. Fortunes rise and fall with copper, especially with a recession scenario. China's problems aren't helping. Should be back to $3 in next 3-6 months, $4 in a year. Operational issues in Q1. Second half should improve. Sit tight. You could dip your toe in Q4.

Attracted to it, but doesn't own or recommend. He rates it a 5, which is neutral. Gold and copper in Mongolia. Data doesn't justify labeling findings as "massive" discoveries.

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. The sector and in particular the company has shown good momentum. Good cash flow off-sets their stretched balance sheet. Cheap on valuation. Unlock Premium - Try 5i Free

It has a higher level of production in the U.S. so would be less affected by tariffs than other Canadian lumber companies. The U.S. needs Canadian lumber and one quarter of production from B.C. goes to the U.S., -  but lumber is still needed for B.C.

“Jumps and Steps” – quite common in junior companies. Each jump is a news item. As it gets closer to production, it will keep on doing this. Pullbacks are due to profit taking. Must stay above the $0.30 level, otherwise it may be bad news.

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research It is certainly not beyond possibility. Bloomberg default ratio is 7.36%, which is very high for that indicator. Cash flow was negative in the last quarter, yet 12-month interest expenses were $36.1M net. With its small size and Cuban and other issues, we are not…

Does not own shares. Prefers companies companies with lower costs and higher return on capital. 

In transition, difficult to analyze. Not really covering its distribution. Investors hoping dividend won't be cut.

Industrial stocks have come off on tariff, and other, fears. Very good ROE profile. Excellent earnings growth, with analysts projecting ~30% earnings growth a year for next 3 years. Quarters can be spotty due to lag time for project approval, so you have to own it for a while. At 9x forward PE, substantial discount…

Tariffs have spurred a flight to safety, and banks can be a good place to be. Level of resistance going way back to 2022, and the stock decided to fall when it reached that level again. Things happen for a reason, investors have memories.The question is: How much selling will take place? Not a prediction,…

CIX vs. BAM Are very different asset managers. CI's balance sheet is not good. Prefers BAM, but shares have risen to a high valuation. Great managers and earnings stream (asset management fees).

In effect, a merchant company. Thrives by adding expertise and capital to other mining companies. He's long this one.Disclosure: Fan of the family, the founder was his mentor.

He owns both this and Manulife. Rates going up have helped a lot. They are working on improving the U.S. side which wasn't going well. The Canadian side is doing well.

They own U.S. hotels, a high-risk, high-reward stock. He's bearish on hotels, which is struggling with labour costs and keeping labour. HOT.UN has done a good job restoring vacancies, in the low-70s, though their peak was in the 80s. However, they've made up the balance on their hotel rates. Their balance sheet is slightly higher,…

(A Top Pick Nov 13/20, Up 33%) Has started buying back shares and paying dividends. Financials should do well as the yield curve steepens. Valuation is not as compelling as before. Middle of the pack. Has moved to US banks and non-financial banks in Canada.

(A Top Pick Dec 04/19, Up 13%) He'd buy it again. Nice value stock. Nice yield. Trading at discount to book. Would benefit from rising interest rates, which he expects. Cheaper than all the banks.

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research It is not looking good, considering more than $900M in debt and cash flow of only $37M in the last 12 months. Interest expenses were $73M, nearly twice cash flow. It does of course have assets, but it is not a seller's market right now,…

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research Hut 8 is traditionally a bitcoin mining company which now has a few main operating segments; digital assets mining, managed services (infrastructure development), and high-performance computing (AI cloud computing). The majority of its revenue is from bitcoin mining (59%), 18% is from managed services, and…

(A Top Pick Feb 24/16. Down 43.33%.) This was a big disappointment. They changed their focus on their business plan. He got stopped out. They were basically doing loans to doctors, but have now changed and is doing software service. The market didn’t like that.

Yield at ~9% is excellent for income investors. High quality business despite small size. Well managed with stable payout ratio that is not at risk. Would recommend holding. 

Would recommend selling. Dividend rising too fast. Earnings not quality. Better options for investors. Current price presenting value to sell. Brookfield a better option. 

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research AIF saw a sharp drop following its Q3 financial results reported in early November. The stock's struggles have been driven by the slowdown in the real estate market and particularly, concerns regarding commerical real estate. Valuation has now come down to a more reasonable 18.3x…

Used to have a habit of running into sharp objects, but CEO has turned this around. Warrants consideration. Great domestic personal and commercial business, capital markets, and wealth management. Modest presence in US, and has stayed out of trouble there.If you already own NA and RY, consider TD or BMO before this one. But if…

Likes real estate in general. In particular, likes those that are building their businesses; not the ones that are just collecting rents, paying dividends, and going sideways. CEO is great and is investing in the company. Turning around. Sector will benefit from lower interest rates. Looked at this one, likes it, but not liquid enough for…

Owns shares in company. Founder led with very strong management team. Recent share price weakness created a buying opportunity. Discounted relative to peers. Good alternative to Canadian bank stocks. Would recommend holding for the long term. 

Stockchase Research Editor: Michael O’Reilly With $144 billion in assets under management, we reiterate IGM as a TOP PICK.  Cash reserves are growing while shares are bought back.  It trades at 11x earnings, under 2x book and supports a respectable 12% ROE.  The robust dividend is backed by a payout ratio under 60% of cash…

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research MOGO is a microcap fintech company which offers a comission free stock trading app and other apps providing personal loans. MOGO has more than 2M members, $9.9B in annual payments volume and a ~13% equity stake in crypto exchange WonderFi (WNDR). It is certainley an…

(A Top Pick Feb 16/16. Up 6.28%.) This has some creative stuff and he had been looking for bond portfolios that are actively managed and a little bit outside the normal ETF’s. He is still buying some of this.

It holds the giant banks, now hitting all-time highs. It benefits from economic expansion, rising interest rates, and a new president that is more business-friendly.

HPB Energy Bull+ ETF. Immediate leverage to oil price moves. If you have a very good near-term bet that you want to make on oil this would be the way to go but if you are looking for an investment in the oil patch that has a long-term investment implications, then you should go to…

In his income portfolio. He's cautious on Canadian energy, as the politics are not agreeable to energy right now, but he still wants to participate. Biggest 20 energy companies in the world. Good way to play in a diversified way with one holding.

HBP S&P 500 Bull (HSU-T) or BMO Equal Weight US Banks Hedged To CDN$ (ZUB-T)? These are 2 completely different things. A lot of people are negative on Bull+ and Bear+ ETFs but he thinks there is a place for these things but he doesn’t think it is here. Thinks it is going to be…

Covered call gives you a boost to income, even more so because the space is volatile. Yield is about 8.5%. If you compare it to XEG, the total return over 3 years is 157%, compared to 94% for NXF. Total return should be your focus, unless you really need the income. MER is usually higher…

The cap is pretty high. He doesn't know if there are more equal weight ETF's in the energy sector

Investing in India. He uses ETFs. Good one-stop way to get at the India 30, which has done well over the last couple of years. Over the next 30 years, India will be where China was. Very exciting area, investors should own.

(A Top Pick August 8/17, Up 8%) This holds what’s left over from the XIU 60. Wanted to get into some smaller stuff to get better diversification, and focus on this rather than the broader-based indices.

Nothing wrong with it as a way to diversify away from the S&P 500. Has more volatility. Hasn't done as well as the Mag 7, but small- and mid-caps have a place in every portfolio.

He would recommend taking a tax loss on this and buying into his energy fund. His fund has fewer names and a larger average market cap. The ETF is passive -- he prefers active management.

ZUB vs. ZUE US banks have been on fire, though valuations are higher. Interest rate margins are good. Do you expect banks to outperform? He suggests holding 25% in ZUB and 75% in the diversified S&P. It depends on how confident you are about the US banks.

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. No longer backed by Aurora. Multiple attempts to redesign stores. Multiple products sold at steep discounts. Deteriorating margins.

So richly priced. Valuation is north of 30x PE because value proposition is so strong and consumers are pinched so hard.

(A Top Pick Jan 23/25, Down 12.7%)Stockchase Research Editor: Michael O’Reilly Our PAST TOP PICK with DOO has triggered its stop at $67.  To remain disciplined, we recommend covering the position at this time.

Prefers Linamar to Magna for its much lower EV of 6x, and they have diverse businesses, like agricultural equipment.

It is unbelievable where this stock is trading at. Acquisitions this year are worth less than half what they paid for them. It was trading at less than half what it was worth. They are trading below the amount of cash they have. It shocks him how far it continues to go down.

Stores may or may not be impacted by Ontario government rolling out more retail locations. The Pellers stepped down from the board, possibly planning a bid to privatize the company but he's not really sure.

(A Top Pick Jun 18/18, Up 1%) Still likes it. It's well-run. They're growing their brands and they have a big opportunity to get into cannabis beverages which will be legal in Canada in October 2019. BRB is well-positioned for this and this market could be very large.

Not his cup of tea. Doesn't own the actual real estate; instead long-term leases, but CGX has to spend the capital. Very capital intensive, and it's not even in control of its own destiny. He and his wife usually just stream content happily at home.

It's never done anything and has disappointed shareholders. He owned shares 10 years and sold it because he got fed up with its lack of progress.

Is fairly illiquid, but profitable and pays a 6.6% dividend. Price targets are high, so there's a runway ahead. But two-thirds of the business is concentrated in Canada, and a big risk is if song royalties rise. It's profitable though. He's watching it.

He owns the quarterly debentures. It was a good story, but now stuck in neutral. Sales and revenue growth are lumpy, because they depend on contracts (in infrastructure). Has disappointed investors. He will let his debentures mature in 2026. They have cash to buy companies as revenue grows. It's worth holding onto.

Provides a service very similar to Alphabet (GOOGL-Q), which is provided for free. When your competitor is providing your services free, it is tough to be competitive.

What a ride since last summer, but look at the fall. Lost 50% in a couple of months. Management is great, wonderful execution. Caught up in euphoria of AI and chips -- now it's the deflation of that craze, similar to 1999-2000.

(A Top Pick Oct 07/20, Down 7%) Not long after making the recommendation the stock benefited from a lot of ETF buying. They exited on the strong buying on a much higher gain. Since then, the ETF buying has evaporated and the stock price has come back down.

Just announced a discovery in Columbia. Flow tested over 2000 barrels per day. This well could produce up to 5000 when brought into production. A very well distributed stock so it might not jump too fast. Company could get taken out.

It was popular in the dot com years. Its service isn't as needed now since Internet speed is way better.

It could become the next Paladin. It has great management and ownership along with a good outlook. It made a big acquisition in the U.S. and if the first two quarters go well the stock could go up.

This has been an extremely good performance year for long-term-care REITs. Not sure there's much more in terms of capital gains from where we are now. Unless substantial pullback, wouldn't buy now.

They hit a financing crisis and needed cash. So, they issued 20 billion share at 1.5 cents per share. A massive dilution that destroyed the shareholder base. Avoid.

Would be less exposed to any tariffs imposed.

Repeatedly compares this to TIH, and TIH always comes out on top in terms of ROIC and dividend growth.

Printing is in decline. Trying to get into packaging. Stock's always been cheap, but it's not a growth market. Instead, look at DCM.

It formed a nice base. It has a strong yield. It is coming out the last few days. We are getting close to a break out.

He bought it as a value play with sum of the parts worth more than it was trading at. They are trying to sell some of the parts. Thinks they will sell all the parts and distribute the cash. $4-$5 breakup value. It is taking longer than he thought to break it up.