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Oil/Natural Gas. Globally and in the US, things are looking pretty solid. Economic growth will finally get a bit of a kick start from the consumer in the US next year. Businesses will start finally spending the cash that is on their balance sheets. This is good for industrials. It all filters through when you have an economically sensitive commodity like oil or natural gas. This should put a bit into the commodity and, as a result, the stocks. Current price on oil is probably as good as you are probably going to get on a fundamental basis. $85-$100 is where crude is going to trade. To get it through $100 on the upside would take some sort of political supply shock. There is some demand destruction happening in crude because of more natural gas being used for power but, also we are living our lives more efficiently creating less demand in general on crude oil. Feels the spread between WTI and WCS will narrow by Q1 of next year. Mid 2014, Enbridge (ENB-T) will be bringing on another pipeline from Chicago down to Cushing, so there is light at the end of the tunnel. On natural gas, he is definitely seeing a lot of the basins reaching peak production. There is increased demand from coal to gas switching and there are declines in the shale gas wells starting to express themselves. The current quote of about $4 will be the new minimum and $4-$5 might be the quote we look at on NYMEX over the next couple of years, which is very positive for the low cost producers he likes to invest in.

Unknown
BUY

This should be a name that you buy and put away. Likes that it is becoming more free cash flow positive and, is hinting to the markets, that dividends and greater dividends are important.

integrated oils
TOP PICK

(A Top Pick Oct 26/12. Down 10.64%.) These smaller stocks have lots of volatility. Canada Pension Plan basically de-risked the story through their debt deal of around $60 million. This money can be used to pay down their bank line but now have running room to finance some pretty exceptional growth, moving them from 10,000 barrels to 20,000 barrels over the next few years. Getting liquid rich gas wells in the Montney. Easily worth $2 a share.

oil / gas
TOP PICK

Acquired a private company that adds a lot of bench strength to their inventories. Good management with their most important objective being the sustainability of the dividend. They are hedging production. Heavy oil differentials will narrow over the next quarter, benefiting the price. Can see the stock moving to $2.50 in short order. Yield of 8.73%.

oil / gas
TOP PICK

This has been under-owned institutionally but the wells they have been drilling recently, with new completion techniques, have been boomers. Have some running room here and he feels they can drill up to 100 wells in Big Stone East and they haven’t even cracked Big Stone West yet. An under-owned story. As gas goes higher, you will get some big buyers coming into the story. No dividend.

oil / gas
SELL

You have a big moving ship here with new management moving in. Laying off employees and dealing with a lot of issues that is taking their eye off the ball. Trying to divest assets in a market that is flooded with assets that are for sale. Have some heavy lifting in front of them. This is the perfect time of the year where you could sell your holdings and crystallize a tax loss.

oil / gas
HOLD

Likes this here. Heavy oil producer, which runs about $30 right now versus WTI. Thinks this will narrow to $20-$25 by March, so there should be some tailwinds on this one. (See Top Picks.)

oil / gas