Oil is down today based on weak US job numbers, Chinese trade data, and the announcement of the Norwegian State Fund selling a large portion of energy investments. This contributes to negative sentiment. We are in a market still where people are looking to not invest in the sector. Oil is up 25% YTD (excluding today) and yet some stocks are still down YTD. This has been a challenging sector for too long. Companies need to start doing significant share buybacks. The valuations are the lowest he has ever seen, they are insane.

MEG was down on release of Q4 results. It gives exposure to heavy oil in Alberta. They can keep production cap and generate $527M in free cashflow based on $60 oil next year. If they chose to buyback stock, they could purchase 36% of their shares outstanding in 1 year. They are focusing on delevering the company. They can service their current debt and thinks they may be better off to buyback shares. Extremely undervalued.

It trades at a higher premium than some of its peers. You do get some foreign exposure with this. Can get higher returns with other names and slightly better balance sheets.

He is challenged with natural gas in general in North America. There is a tonne of low cost supply. There are other names he would strongly prefer. He would not have exposure to Canadian nat gas stocks now.

Should I buy Suncor now until the market turns and then buy a smaller cap with more torque? Do you want to own large cap integrated or mid cap? If he can buy names now at 25-30% free cash flows, he is willing to take on a little more volatility. If you are not invested when that turn happens, you might miss the opportunity because they likely could gap up 10% in a few day. He would be more in the midcaps than where everyone else is hiding such as in Suncor.

Their asset write down was meaningless. Their reserves did not change which is what he cares about. They will generate $400M free cashflow. The stock is trading below their blowdown value. They are doing the right thing by slowing down the drilling and buying back stock. Management are doing the right thing.

He is extremely active in trading in his fund. He may recommend a stock today, but get out of it next month because of situations. They put out a horrible Q4. Their entry in the US was horrific timing. He is not comfortable with this name anymore.

Gives good exposure to the Permian with some Balkan. Growing by 22% this year. About a year out from buying back stock or dividends. There is 100% upside to this name with a recovering oil price. Has good exposure to light oil. Yield = 0.53% (Analysts’ price target is $149.00)