Latest Expert Opinions

Signal
Opinion
Expert
PAST TOP PICK
PAST TOP PICK
May 1, 2018

(A Top Pick July 28, 2017. Down 40%). He recommended buying on weakness, the stock dropped and he recommended it most strongly last December. It is up 50% since then. He thinks the stock can go up to $7. He pointed out on the 10 year chart that the stock has massive upside when the price of oil moves. For example, it went from less than $15 in 2012 to nearly $60 in 2015. Similarly in 2009-2010, the stock went from $2 to $17. They go from being hated to being loved, and right now, the natural gas story is getting strong. Storage is low, last week there was even a draw. The US industry is so focused on drilling oil and liquids that the focus on natural gas is just not there. The LNG takeaway capacity in the US is going from 2 bcf to 9 by the end of 2019. Canada does have the pipelines into the midwest, and they are expanding. These can carry a lot of Canadian production into this growth of demand of 7 bcf. He also expects LNG to BC to be approved, which will result in a further increase of demand for Canadian natural gas, at better prices.

(A Top Pick July 28, 2017. Down 40%). He recommended buying on weakness, the stock dropped and he recommended it most strongly last December. It is up 50% since then. He thinks the stock can go up to $7. He pointed out on the 10 year chart that the stock has massive upside when the price of oil moves. For example, it went from less than $15 in 2012 to nearly $60 in 2015. Similarly in 2009-2010, the stock went from $2 to $17. They go from being hated to being loved, and right now, the natural gas story is getting strong. Storage is low, last week there was even a draw. The US industry is so focused on drilling oil and liquids that the focus on natural gas is just not there. The LNG takeaway capacity in the US is going from 2 bcf to 9 by the end of 2019. Canada does have the pipelines into the midwest, and they are expanding. These can carry a lot of Canadian production into this growth of demand of 7 bcf. He also expects LNG to BC to be approved, which will result in a further increase of demand for Canadian natural gas, at better prices.

Josef Schachter
President, Schachter Asset Management
Price
$2.000
Owned
Yes
PAST TOP PICK
PAST TOP PICK
May 1, 2018

(A Top Pick July 28, 2017. Down 23%). This is quiet money. It’s a driller. Its book value is $4.15, which is much higher than its trading price. This is a Canadian driller with only 3 rigs in the United States. Its price hasn’t improved because it is locked in Canada. The AECO price (http://www.gasalberta.com/gas-market/market-prices?p=pricing-market.htm) is about $2 but will be $2.75 to $3.00 by Q4. Similarly, the NYMEX price (https://www.eia.gov/dnav/ng/NG_PRI_FUT_S1_D.htm) was up a nickel today even as oil went down, could by $4 by Q4.

(A Top Pick July 28, 2017. Down 23%). This is quiet money. It’s a driller. Its book value is $4.15, which is much higher than its trading price. This is a Canadian driller with only 3 rigs in the United States. Its price hasn’t improved because it is locked in Canada. The AECO price (http://www.gasalberta.com/gas-market/market-prices?p=pricing-market.htm) is about $2 but will be $2.75 to $3.00 by Q4. Similarly, the NYMEX price (https://www.eia.gov/dnav/ng/NG_PRI_FUT_S1_D.htm) was up a nickel today even as oil went down, could by $4 by Q4.

Josef Schachter
President, Schachter Asset Management
Price
$1.160
Owned
No
COMMENT
COMMENT
May 1, 2018

The stock has bounced because of the higher oil price. It has sold assets to bring down debt, but debt is $600 million compared to an equity base of $1 billion, so it is still a bit high. At this point, they don’t have any key assets for sale. Their low production is 19,000 boe/day, which is this quarter. They will bring on more wells to bring production to 23,000 boe/day by the end of the year. Cash flow will be about $0.20 per year. His target for this year is $2 and $4.50 for the next 3-to-5 years. The company has a new CEO, with relevant (thermal oil) experience.

The stock has bounced because of the higher oil price. It has sold assets to bring down debt, but debt is $600 million compared to an equity base of $1 billion, so it is still a bit high. At this point, they don’t have any key assets for sale. Their low production is 19,000 boe/day, which is this quarter. They will bring on more wells to bring production to 23,000 boe/day by the end of the year. Cash flow will be about $0.20 per year. His target for this year is $2 and $4.50 for the next 3-to-5 years. The company has a new CEO, with relevant (thermal oil) experience.

Josef Schachter
President, Schachter Asset Management
Price
$1.110
Owned
Unknown
BUY WEAKNESS
BUY WEAKNESS
May 1, 2018

He’ll be going to the Annual General Meeting this week, to be at the contentious Board election. The company has a fabulous asset base in Saskatchewan and in the United States. He thinks the stock would be a good buy under $10 and better under $9 with the oil price retreating later this year. Management has seen the pressure that they have to perform. Debt went up in 2017 and has to come down.

He’ll be going to the Annual General Meeting this week, to be at the contentious Board election. The company has a fabulous asset base in Saskatchewan and in the United States. He thinks the stock would be a good buy under $10 and better under $9 with the oil price retreating later this year. Management has seen the pressure that they have to perform. Debt went up in 2017 and has to come down.

Josef Schachter
President, Schachter Asset Management
Price
$11.180
Owned
Unknown
COMMENT
COMMENT
May 1, 2018

Their Q1 production was 488,000 boe/day because of all their acquisitions but they reported losses from their hedge book. Their operating margin was $157 million cash versus $305 a year before, but they spent $522 million. The company has $9.8 billion of debt, up from 9.5 billion at the end of December. They have about a half billion dollars of assets for sale. They have $19.4 billion of equity. Book value (ex goodwill) is about $13.92, which is higher than the stock price. The dividend is about 5 cents per quarter. They have a new CEO. It is not clear where their growth will be. Schachter thinks they should focus on their thermal operations and get rid of their conventional-world assets. He is concerned about the balance sheet. The debt to equity ratio looks tolerable. He compared it to Whiting Petroleum, Chesapeake Energy and WPX Energy, all well-known American energy companies that are treated as very exciting but have much worse balance sheets. He sees the Canadian energy companies as value stories compared to the American ones. The bargains are in Canada.

Their Q1 production was 488,000 boe/day because of all their acquisitions but they reported losses from their hedge book. Their operating margin was $157 million cash versus $305 a year before, but they spent $522 million. The company has $9.8 billion of debt, up from 9.5 billion at the end of December. They have about a half billion dollars of assets for sale. They have $19.4 billion of equity. Book value (ex goodwill) is about $13.92, which is higher than the stock price. The dividend is about 5 cents per quarter. They have a new CEO. It is not clear where their growth will be. Schachter thinks they should focus on their thermal operations and get rid of their conventional-world assets. He is concerned about the balance sheet. The debt to equity ratio looks tolerable. He compared it to Whiting Petroleum, Chesapeake Energy and WPX Energy, all well-known American energy companies that are treated as very exciting but have much worse balance sheets. He sees the Canadian energy companies as value stories compared to the American ones. The bargains are in Canada.

Josef Schachter
President, Schachter Asset Management
Price
$12.930
Owned
Unknown
COMMENT
COMMENT
May 1, 2018

This stock compares to Trinidad Drilling (TDG-T) and both are on his coverage list. He likes what he sees out of Ensign. It has $740 million debt versus $1.7 billion of equity. Their book value is $10.77 and the stock trades at $6. They have a very big presence in the United States. Of $1 billion in 2017 revenue, $459 billion came from the US, $262 from Canada and the rest international. They’re in the Middle East and in Mexico and Venezuela. Venezuela adds some risk to the stock. He is hoping to add coverage on weakness.

This stock compares to Trinidad Drilling (TDG-T) and both are on his coverage list. He likes what he sees out of Ensign. It has $740 million debt versus $1.7 billion of equity. Their book value is $10.77 and the stock trades at $6. They have a very big presence in the United States. Of $1 billion in 2017 revenue, $459 billion came from the US, $262 from Canada and the rest international. They’re in the Middle East and in Mexico and Venezuela. Venezuela adds some risk to the stock. He is hoping to add coverage on weakness.

Josef Schachter
President, Schachter Asset Management
Price
$6.110
Owned
Unknown
COMMENT
COMMENT
May 1, 2018

A large amount of US exports are products. The refiners have crack spreads that are currently very favorable, which is why you’re seeing merger mania. Imperial Oil, Husky and others in this space are talking about significant profit growth in their Refining and Marketing business. Their net income this quarter was $516 million up from $333 the year before. If you look at the long-term chart, this stock hasn’t made money for investors. The dividend yield is not great. Compare it to Suncor. This hasn’t been an exciting place to be.

Imperial Oil(IMO-T)
May 1, 2018

A large amount of US exports are products. The refiners have crack spreads that are currently very favorable, which is why you’re seeing merger mania. Imperial Oil, Husky and others in this space are talking about significant profit growth in their Refining and Marketing business. Their net income this quarter was $516 million up from $333 the year before. If you look at the long-term chart, this stock hasn’t made money for investors. The dividend yield is not great. Compare it to Suncor. This hasn’t been an exciting place to be.

Josef Schachter
President, Schachter Asset Management
Price
$39.350
Owned
Unknown