Latest Expert Opinions

Signal
Opinion
Expert
TOP PICK
TOP PICK
March 11, 2014

(A Top Pick April 17/13. Up 52.33%.) There is still more to go. Still very inexpensive. Reported last week and the stock fell which he found peculiar. Sitting on a 10 year inventory of Cardium, which is fairly well delineated now. Feels they have the 2nd most sustainable dividend model in Canada. They can grow production by 10% and pay a 5% dividend. Can see $13 in one year.

(A Top Pick April 17/13. Up 52.33%.) There is still more to go. Still very inexpensive. Reported last week and the stock fell which he found peculiar. Sitting on a 10 year inventory of Cardium, which is fairly well delineated now. Feels they have the 2nd most sustainable dividend model in Canada. They can grow production by 10% and pay a 5% dividend. Can see $13 in one year.

Eric Nuttall
Partner & Senior Portfolio Manager, Ninepoint Partners
Price
$10.750
Owned
Yes
PAST TOP PICK
PAST TOP PICK
March 11, 2014

(A Top Pick April 17/13. Up 33.45%.) Even though there seems to be a weakness in the commodity of natural gas, you can still make money in a company that produces the commodity. This is heavily weighted towards natural gas. What he likes is that you are buying into the best management team in the business when it comes to natural gas and sitting on some of the best acreage in Canada. Their production rate far exceeds the national average. Thinks they will be able to grow production by 70% this year and upwards of 35% in 2015. He has the stock valued at roughly 6.7X next year’s enterprise value cash flow. Historically this company trades at about 8. As we get closer to year end, people will realize just how cheap it is and he is expecting it to be a $60 stock

(A Top Pick April 17/13. Up 33.45%.) Even though there seems to be a weakness in the commodity of natural gas, you can still make money in a company that produces the commodity. This is heavily weighted towards natural gas. What he likes is that you are buying into the best management team in the business when it comes to natural gas and sitting on some of the best acreage in Canada. Their production rate far exceeds the national average. Thinks they will be able to grow production by 70% this year and upwards of 35% in 2015. He has the stock valued at roughly 6.7X next year’s enterprise value cash flow. Historically this company trades at about 8. As we get closer to year end, people will realize just how cheap it is and he is expecting it to be a $60 stock

Eric Nuttall
Partner & Senior Portfolio Manager, Ninepoint Partners
Price
$48.580
Owned
Yes
COMMENT
COMMENT
March 11, 2014

Stock has been weak over the past month because of their 19% acquisition of Longview (|LNV-T). They are hoping to do a merger. The street felt Longview didn’t have the greatest quality of assets and yet Surge had built its reputation on acquiring “elite” assets. His impression is that this is not as good a company as it was before because of the acquisition. 8.9% dividend is sustainable but the stock has lost a tremendous amount of momentum. Really doesn’t see this stock outperforming.

Stock has been weak over the past month because of their 19% acquisition of Longview (|LNV-T). They are hoping to do a merger. The street felt Longview didn’t have the greatest quality of assets and yet Surge had built its reputation on acquiring “elite” assets. His impression is that this is not as good a company as it was before because of the acquisition. 8.9% dividend is sustainable but the stock has lost a tremendous amount of momentum. Really doesn’t see this stock outperforming.

Eric Nuttall
Partner & Senior Portfolio Manager, Ninepoint Partners
Price
$5.790
Owned
Unknown
DON'T BUY
DON'T BUY
March 11, 2014

There are a few dynamics in the story that might challenge the stock price from reaching $10.62 a year from now. Shareholder base largely consists of New York hedge funds as opposed to fundamental buyers. That community needs to sell eventually to realize again on a trading catalyst. This is a stock that you need to be really on top of. Risk/reward is not worth the gray hair.

There are a few dynamics in the story that might challenge the stock price from reaching $10.62 a year from now. Shareholder base largely consists of New York hedge funds as opposed to fundamental buyers. That community needs to sell eventually to realize again on a trading catalyst. This is a stock that you need to be really on top of. Risk/reward is not worth the gray hair.

Eric Nuttall
Partner & Senior Portfolio Manager, Ninepoint Partners
Price
$8.230
Owned
No
COMMENT
COMMENT
March 11, 2014

Could very well be a takeover target. Have a very large land spread in the Duvernay which is being drilled by the likes of Chevron and Shell. Just came out with stellar results last week. Has had a decent run. If there was a joint venture or a corporate sale, you could see $35 but it comes down to the selling motivation of a family that has a controlling stake in it. There will be more drilling results as the year progresses and the stock may go up on drilling results. Very much a catalyst driven stock.

Could very well be a takeover target. Have a very large land spread in the Duvernay which is being drilled by the likes of Chevron and Shell. Just came out with stellar results last week. Has had a decent run. If there was a joint venture or a corporate sale, you could see $35 but it comes down to the selling motivation of a family that has a controlling stake in it. There will be more drilling results as the year progresses and the stock may go up on drilling results. Very much a catalyst driven stock.

Eric Nuttall
Partner & Senior Portfolio Manager, Ninepoint Partners
Price
$26.900
Owned
No
DON'T BUY
DON'T BUY
March 11, 2014

Not a name that he is comfortable with. Lost their key geological person who took them into the disturbed (???) Foothills trend where they had a remarkable amount of success. Their development inventory in that play is shrinking and they’ve since farmed in on Encana (ECA-T) which presents a whole new element of risks. Stock appears to be cheap on current production but cheap stocks usually are more expensive than you thought because production does not quite grow at the same pace.

Manitok Energy (MEI-X)
March 11, 2014

Not a name that he is comfortable with. Lost their key geological person who took them into the disturbed (???) Foothills trend where they had a remarkable amount of success. Their development inventory in that play is shrinking and they’ve since farmed in on Encana (ECA-T) which presents a whole new element of risks. Stock appears to be cheap on current production but cheap stocks usually are more expensive than you thought because production does not quite grow at the same pace.

Eric Nuttall
Partner & Senior Portfolio Manager, Ninepoint Partners
Price
$2.320
Owned
No
COMMENT
COMMENT
March 11, 2014

There is indication that the fracing industry in Canada is strengthening. There are 3 companies in Canada that fracture stimulate wells, this one, Trican (TCW-T) and Calfrac (CFW-T). Canyon is a pure play on Canada. Put out an absolutely miserable quarter which shows just how competitive the current landscape is. There were signs that things are improving. He is a little cautious in the near-term. Later on this year and into 2015, this segment of the marketplace is tightening and these names will have pricing power once again. EBITDA margins that are currently down around 11%, may go back to their historical 25%-35%. The name has upside, but you are going to have to wait a little longer than what current consensus is. There could be near-term weakness if the price of gas comes off because of fuel substitution to coal.

There is indication that the fracing industry in Canada is strengthening. There are 3 companies in Canada that fracture stimulate wells, this one, Trican (TCW-T) and Calfrac (CFW-T). Canyon is a pure play on Canada. Put out an absolutely miserable quarter which shows just how competitive the current landscape is. There were signs that things are improving. He is a little cautious in the near-term. Later on this year and into 2015, this segment of the marketplace is tightening and these names will have pricing power once again. EBITDA margins that are currently down around 11%, may go back to their historical 25%-35%. The name has upside, but you are going to have to wait a little longer than what current consensus is. There could be near-term weakness if the price of gas comes off because of fuel substitution to coal.

Eric Nuttall
Partner & Senior Portfolio Manager, Ninepoint Partners
Price
$12.290
Owned
Yes