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Today, Bill Harris, CFA commented about whether WCP-T, CNQ-T, ARX-T, PDL-T, ECA-T, WTE-T, LIF-T, ENB-T, TRP-T, TOU-T, VET-T, ARX-T, KEY-T, ALA-T, TD-T, SLF-T, IMG-T, ATRL-T, IPL-T, SU-T are stocks to buy or sell.

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COMMENT

Market Outlook He is positive on Canadian energy stocks for the first time in five years. He can now construct a positive outlook for the forward value of Canadian energy prices and the stocks have already been crushed -- a good time to enter. In the previous few years, producers continued to grow production not because of good energy prices, but because of prolific increases in production productivity. Now, he is seeing energy production actually falling, while export capacity is increasing. He sees natural gas producers moving back to positive cash flows and earnings. Oil takeaway capacity will move higher by 2022, he thinks. The stock market will take this into account and, over the next six months, will discount the risk to not having enough takeaway capacity. Now is the time to focus on energy.

HOLD

Now that he is enthusiastic about energy going forward, SU-T is actually relatively expensive to its peers. This may actually cause them to under-perform in the space. If you want the consistent cash flow and decent yield you can continue to hold this for the next 30 years. He has moved out looking for better opportunities.

BUY

5 year time horizon? Over 5 years we will know how their petrochemical plant will play out? By 2022, it should be in operation. The company has great long term contracts in place for the base load of it non-petrochemical business already and he looks for them to the same for this new project. He hopes, as a large shareholder, the new business will add value to their business. In the meantime a good place to park your money and collect the dividend. Yield 6.9%

RISKY

Why the big rally lately? Lots of volatility here. The problem is trying to understand the core business strategy. They used to do a "turnkey" construction business, with a fixed cap on construction costs -- moving towards cost plus instead. Now, with recent asset write downs, he is having a hard time value the underlying business as it changes strategy. He expects further write downs. He would like to see them de-risk things before coming back in. A big shareholder has come in recently to help recapitalize them. A speculative buy at this stage, but he is not back in.

COMMENT

Why is there no interest in the gold space? The company has done a great job restructuring. They had recently hinted the company was going to up for sale, but no one showed up. The company is cash flow positive at this level. He is into gold because he likes the asset class. He worries that IMG-T is not very good at increasing production. He has exposure in gold, because global interest rates are near or below zero. When the gold market decides to move, it will go quickly. Companies in this space have to prove to investors they are making money.

COMMENT

Zero interest rates are horrendous for insurance companies. SLF-T is trying to become a wealth partner for people into retirement. This would turn them into a fee based business and there has been some success here. He finds other assets, like Canadian banks, easier to understand so he has not entered into this space.

COMMENT

Why does volume trade spike in the last minutes of trading? The bulk of trading volume for most stocks actually focuses on the early start of the day, so this is unusual. As this in the index, there may be some index balancing that is going on. He is uncertain overall.

PAST TOP PICK

(A Top Pick Oct 05/18, Down 3%) This was a theme of trying to catch a falling knife. He was surprised how it got wiped out and he got stopped out earlier. They spun out the Canadian utilities business, which was unexpected. This left the US acquisition in Washington. The market didn't like the debt level, when interest rates were going up.

PAST TOP PICK

(A Top Pick Oct 05/18, Up 2%) He actually doubled up on this position. What has transformed the business is that natural gas processing margins have expanded. They outlined a large infrastructure plan for 2022 to take advantage of growing production. In three years time the company's earnings will be very positive, he feels. Yield 5.8%

PAST TOP PICK

(A Top Pick Oct 05/18, Down 50%) Natural gas and liquids cash flows have been challenged. He loves the management team here. He was stopped out in the fall. Now, the company is incredibly cheap and natural gas prices are improving. He would buy this again.

COMMENT

From a pension plan manager perspective, he is looking for yield. He worries that there may something wrong with VET-T as the dividend is so high. He swapped into ARX-T instead. He met with management recently and does not see anything specific to worry about and the team said their dividend is safe -- for now. Yield 10%

HOLD

They are making the transition from moving from dry natural gas into more liquids. The market has not bought into it yet. At these commodity prices the liquids business is cash flow positive and in two years time it should be trading at 2 times cash flow. Very well run company producing close to 300,000 boed. (Analysts’ price target is $23.00)

COMMENT

The Federal government is anti-pipeline? He looks at either TRP-T and ENB-T for this space. He prefers the valuation of ENB-T at this time. He likes how TRP-T is re-inventing itself however. There is a big question mark around whether Keystone pipeline will actually get built. Any hint of failing to go forward could negatively impact the TRP-T share price.

COMMENT

WAIT

In the industrial base metal space in Canada, there is WTE-T and LIF-T. Both are very fairly priced right now. A highly commodity focused and cyclical business. This space is best to buy into when stock prices have been really hard hit. Global growth for steel trade is becoming a concern. It is not a good time to enter. The yield on LIF-T is 3.8%.

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