Opinions by Mason Granger | StockChase
558
Mason Granger

Portfolio Manager

ON STOCKCHASE SINCE Sep 2009

Sentry Investments

558
Mason Granger

Portfolio Manager

ON STOCKCHASE SINCE Sep 2009

Sentry Investments


Opinions by Mason Granger


Signal Opinion Expert Chart
N/A
General Market Comment 

December 6, 2016

Energy. Christmas came early with the November 30 announcement that OPEC had struck a deal. He hadn’t seen this happening. There was a tremendous amount of pessimism going into the November 30 meeting. Even the most bullish forecasters were starting to doubt that something would happen. We had a $6 rally in crude prices. Now it comes down to whether or not members will actually stick to these targets. They also have 600,000 barrels from non-OPEC producers, committed to be taken off the market. Half of that is Russia, and Russia has a terrible track record of keeping their word. Even though the deal was not expected, there were still signposts that suggested the market was going to balance itself at some point in 2017. This deal has effectively accelerated the point at which the markets balance, and can start working through these high inventory levels around the world. OPEC is now producing about 34.2 million barrels a day, and that is up substantially in the last couple of months. He thinks that with this impending deal, there was a race to get production up because producers probably knew that at some point, if the deal was going to be arrived at, it would be based on where their production had been most recently. We don’t need oil prices to get back to $80-$90-$100 for North American companies to really make healthy returns. He looked at some of the individual well economics of Canadian producers at $90 Cdn per barrel. They are generating approximately the same rates of return at $60 Cdn. Currently, we are now more of $70 Cdn, so there are a lot of very investable companies in Canada and North America at these price levels.

Energy. Christmas came early with the November 30 announcement that OPEC had struck a deal. He hadn’t seen this happening. There was a tremendous amount of pessimism going into the November 30 meeting. Even the most bullish forecasters were starting to doubt that something would happen. We had a $6 rally in crude prices. Now it comes down to whether or not members will actually stick to these targets. They also have 600,000 barrels from non-OPEC producers, committed to be taken off the market. Half of that is Russia, and Russia has a terrible track record of keeping their word. Even though the deal was not expected, there were still signposts that suggested the market was going to balance itself at some point in 2017. This deal has effectively accelerated the point at which the markets balance, and can start working through these high inventory levels around the world. OPEC is now producing about 34.2 million barrels a day, and that is up substantially in the last couple of months. He thinks that with this impending deal, there was a race to get production up because producers probably knew that at some point, if the deal was going to be arrived at, it would be based on where their production had been most recently. We don’t need oil prices to get back to $80-$90-$100 for North American companies to really make healthy returns. He looked at some of the individual well economics of Canadian producers at $90 Cdn per barrel. They are generating approximately the same rates of return at $60 Cdn. Currently, we are now more of $70 Cdn, so there are a lot of very investable companies in Canada and North America at these price levels.

Unknown
Mason Granger

Portfolio Manager, Sentry Investments...

PricePrice
$0.020
Owned Owned
_N/A

Must be logged in to use chart
BUY

(Market Call Minute.) Recently added this to his portfolio. He really likes it. Low cost gas. A great balance sheet. Internally funded growth.

oil/gas

(Market Call Minute.) Recently added this to his portfolio. He really likes it. Low cost gas. A great balance sheet. Internally funded growth.

oil/gas
Mason Granger

Portfolio Manager, Sentry Investments...

PricePrice
$9.750
Owned Owned
Yes

Must be logged in to use chart
HOLD

(Market Call Minute.) Keeping an eye on this because they’ve had a changeover of management and board. They seem to be doing the right things, but just not quite there yet for him.

oil/gas

(Market Call Minute.) Keeping an eye on this because they’ve had a changeover of management and board. They seem to be doing the right things, but just not quite there yet for him.

oil/gas
Mason Granger

Portfolio Manager, Sentry Investments...

PricePrice
$1.450
Owned Owned
No

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COMMENT
Blackbird Energy Inc(BBI-X) 

December 6, 2016

A small emerging Montney producer. He made a small flow-through investment in this company. They have a little over 87 sections of land in an area called Elmworth Pipestone. At Encana’s recent investor day, they highlighted the emerging potential of Pipestone. For a multi-billion dollar company to highlight this, this is a company that has material exposure. For a company this size, it is interesting because of Encana’s interest in this play.

Energy

A small emerging Montney producer. He made a small flow-through investment in this company. They have a little over 87 sections of land in an area called Elmworth Pipestone. At Encana’s recent investor day, they highlighted the emerging potential of Pipestone. For a multi-billion dollar company to highlight this, this is a company that has material exposure. For a company this size, it is interesting because of Encana’s interest in this play.

Energy
Mason Granger

Portfolio Manager, Sentry Investments...

PricePrice
$0.560
Owned Owned
Unknown

Must be logged in to use chart
TOP PICK

All 3 picks have recently done fairly transformative acquisitions. He wants to own companies that have institutional following and access to capital markets and could do smart acquisitions at the bottom of the cycle. A natural gas producer and has a Pouce Coupe asset. His issue historically has been that they have always had too much debt, but they did a $625 million acquisition of a Gordondale asset that is contiguous to their Pouce Coupe asset. The 2 fit together really well. It has the effect of lowering the decline rate, and he thinks has increased the cash flow profile. They also brought down their balance sheet leverage. Has a five-year growth plan in place that is entirely funded by internally generated cash flow. He can see this being in the mid-teens by next year. Dividend yield of 1.04%. (Analysts’ price target is $12.35.)

oil/gas

All 3 picks have recently done fairly transformative acquisitions. He wants to own companies that have institutional following and access to capital markets and could do smart acquisitions at the bottom of the cycle. A natural gas producer and has a Pouce Coupe asset. His issue historically has been that they have always had too much debt, but they did a $625 million acquisition of a Gordondale asset that is contiguous to their Pouce Coupe asset. The 2 fit together really well. It has the effect of lowering the decline rate, and he thinks has increased the cash flow profile. They also brought down their balance sheet leverage. Has a five-year growth plan in place that is entirely funded by internally generated cash flow. He can see this being in the mid-teens by next year. Dividend yield of 1.04%. (Analysts’ price target is $12.35.)

oil/gas
Mason Granger

Portfolio Manager, Sentry Investments...

PricePrice
$9.620
Owned Owned
Yes

Must be logged in to use chart
COMMENT
Bonavista Energy Corp(BNP-T) 

December 6, 2016

This has gone through a period of significant adjustment to the current commodity prices. They’ve had to right size the dividend, reduce leverage levels, sell assets, etc., and he thinks they are through the worst of it. This is something that he thinks he should be looking closer at.

oil/gas

This has gone through a period of significant adjustment to the current commodity prices. They’ve had to right size the dividend, reduce leverage levels, sell assets, etc., and he thinks they are through the worst of it. This is something that he thinks he should be looking closer at.

oil/gas
Mason Granger

Portfolio Manager, Sentry Investments...

PricePrice
$4.810
Owned Owned
Unknown

Must be logged in to use chart
COMMENT
Baytex Energy Corp(BTE-T) 

December 6, 2016

He has a very small position. Views this as torque to higher oil prices. He is comfortable with the credit profile, which has been an issue in the past. They ended up securitizing their credit facility against the assets, and pushing down the subordinate note holders. Doesn’t think the company has an issue with debt, but it has struggled in an environment of lower oil prices. Once we get to $55 oil, it becomes profitable again. Once it gets to $60 and beyond, this company looks a lot better than it does now.

oil/gas

He has a very small position. Views this as torque to higher oil prices. He is comfortable with the credit profile, which has been an issue in the past. They ended up securitizing their credit facility against the assets, and pushing down the subordinate note holders. Doesn’t think the company has an issue with debt, but it has struggled in an environment of lower oil prices. Once we get to $55 oil, it becomes profitable again. Once it gets to $60 and beyond, this company looks a lot better than it does now.

oil/gas
Mason Granger

Portfolio Manager, Sentry Investments...

PricePrice
$6.200
Owned Owned
Yes

Must be logged in to use chart
SELL
Chinook Energy Inc(CKE-T) 

December 6, 2016

(Market Call Minute.)

oil/gas

(Market Call Minute.)

oil/gas
Mason Granger

Portfolio Manager, Sentry Investments...

PricePrice
$0.470
Owned Owned
Unknown

Must be logged in to use chart
SELL
Cona Resources(CONA-T) 

December 6, 2016

A heavy oil producer. They IPO’d back in 2014 at the peak of market. This struggled, partly because they had a SAGD project that had a lot of technical challenges. He sold his holdings. As an investor, he didn’t like that they had a dividend reinvestment program. The move they did today was to reduce the dividend by 50% and eliminate the DRIP program. They also announced a tender for shares at $4, and he doesn’t think that is a significant vote of confidence for the 2 major shareholders to say that shareholders can have all of their stocks. He doesn’t look at this company as particularly investable. If you own shares, he would tender to the offer.

A heavy oil producer. They IPO’d back in 2014 at the peak of market. This struggled, partly because they had a SAGD project that had a lot of technical challenges. He sold his holdings. As an investor, he didn’t like that they had a dividend reinvestment program. The move they did today was to reduce the dividend by 50% and eliminate the DRIP program. They also announced a tender for shares at $4, and he doesn’t think that is a significant vote of confidence for the 2 major shareholders to say that shareholders can have all of their stocks. He doesn’t look at this company as particularly investable. If you own shares, he would tender to the offer.

0
Mason Granger

Portfolio Manager, Sentry Investments...

PricePrice
$3.600
Owned Owned
No

Must be logged in to use chart
COMMENT

Has been a disappointing performer this year. The bright side is, you have an opportunity to buy this at a valuation that is almost at a historical low. They have an enormous depth of inventory. The well results from their US holdings is very encouraging. They are doing some very novel things in terms of water flood. Have cut drilling times from 8 days to 5 days in a year in the Bakken. Sentiment has been poor for them. This would be a buying opportunity for a long-term holder.

oil/gas

Has been a disappointing performer this year. The bright side is, you have an opportunity to buy this at a valuation that is almost at a historical low. They have an enormous depth of inventory. The well results from their US holdings is very encouraging. They are doing some very novel things in terms of water flood. Have cut drilling times from 8 days to 5 days in a year in the Bakken. Sentiment has been poor for them. This would be a buying opportunity for a long-term holder.

oil/gas
Mason Granger

Portfolio Manager, Sentry Investments...

PricePrice
$17.540
Owned Owned
Yes

Must be logged in to use chart
DON'T BUY
Cequence Energy Ltd.(CQE-T) 

December 6, 2016

(Market Call Minute.) A small emerging Montney play. The Board recently fired management, and he is not sure where the company goes from here. He can think of better Montney players.

oil/gas

(Market Call Minute.) A small emerging Montney play. The Board recently fired management, and he is not sure where the company goes from here. He can think of better Montney players.

oil/gas
Mason Granger

Portfolio Manager, Sentry Investments...

PricePrice
$0.260
Owned Owned
No

Must be logged in to use chart
SELL
Delphi Energy Corp.(DEE-T) 

December 6, 2016

This has always grappled with debt loads that he felt were too high. Have always had a considerable hedge book. They’ve had to sell properties and do a joint venture.

oil/gas

This has always grappled with debt loads that he felt were too high. Have always had a considerable hedge book. They’ve had to sell properties and do a joint venture.

oil/gas
Mason Granger

Portfolio Manager, Sentry Investments...

PricePrice
$1.420
Owned Owned
No

Must be logged in to use chart
COMMENT

Recently added this to his portfolio. They brought in a new CEO, and have done a few acquisitions. 2016 is going to be a fairly transformative year for them. He likes the direction it is taking, and the assets they are buying. Likes the prospects going into 2017 and thinks there is considerable upside.

oil/gas

Recently added this to his portfolio. They brought in a new CEO, and have done a few acquisitions. 2016 is going to be a fairly transformative year for them. He likes the direction it is taking, and the assets they are buying. Likes the prospects going into 2017 and thinks there is considerable upside.

oil/gas
Mason Granger

Portfolio Manager, Sentry Investments...

PricePrice
$3.960
Owned Owned
Yes

Must be logged in to use chart
SELL
Gear Energy(GXE-T) 

December 6, 2016

(Market Call Minute.) A heavy oil producer and cheap valuation, so he is not looking to buy this.

oil/gas

(Market Call Minute.) A heavy oil producer and cheap valuation, so he is not looking to buy this.

oil/gas
Mason Granger

Portfolio Manager, Sentry Investments...

PricePrice
$0.810
Owned Owned
Unknown

Must be logged in to use chart
PAST TOP PICK
Granite Oil Corp(GXO-T) 

December 6, 2016

(A Top Pick July 21/16. Down 23.74%.) This is a product of a split up of D3. A little bit less than 4000 barrels a day. They have a novel gas flood enhanced oil recovery they’ve been trying to get going for several years. A single asset company, very concentrated concept. He sold his holdings.

oil/gas

(A Top Pick July 21/16. Down 23.74%.) This is a product of a split up of D3. A little bit less than 4000 barrels a day. They have a novel gas flood enhanced oil recovery they’ve been trying to get going for several years. A single asset company, very concentrated concept. He sold his holdings.

oil/gas
Mason Granger

Portfolio Manager, Sentry Investments...

PricePrice
$5.640
Owned Owned
No

Must be logged in to use chart
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