Investment Q&A

Q: The % of my portfolio that is correlated to oil/gas is at an all time low since the oil price meltdown. I also dumped a few hydro carbon stocks on the way down (Husky/Atlas/EnCana). I am now looking to wade back into the sector to a minor degree. Dividends are not important to me. What is important is relatively decent financial strength, lower cost reserves and good management.
What would you recommend taking a look at?

Q: Hi Peter and Team,

I've written to you before about COS. I'm a long term shareholder of this company. I own 100K shares. Will I get a chance to vote on this deal offered by Su - and what's your take? Personally, I think it's a good fit and I think Su will be able to finally! get the syncrude project moving in a better direction (i believe that operation suffers from too many cooks in the kitchen syndrome). many thanks!

Q: I would appreciate your opinion on this company.
Is it a "buy" at this low price?
Could it be a target for a takeover by another company?
Thank you.

Q: Hello, I currently have about 2.3 million in stocks and rrsp mutual funds. I am 56, retired and seem to be doing ok. I'm spending a lot less than when I was working. :)

I am possibly selling my home and have already purchased a home in Florida, spending summers in Canada. I'm clearing about a million dollars. Very tempted to put it all in oil stocks such as surge, wcp, rrx as I think these will be huge gainers once the oil market and overall market starts to cycle back into better waters.

What would you do? I won't need the money for 2 years. I'd like to get a substantial return of course and feel nows a great time. What are your thoughts?

Dave

Q: Hi, cos has an offer in today from another company. I have a substantial amount of cos. Is this offer a good thing or a bad thing? Will I make money or loose more?

Dave

Q: Peter and Team, Hi
I have held Rock Energy for quite some time. It has gone down 70% since I bought. You know that we tend to hang onto our losers. What do you recommend? Any chance it will go up anytime soon? Should I dump it before it goes to zero? Regards... Joe

Q: Hi Team, Question on oil in the future. What is your opinion on where the price of oil will be in about a yr. I have heard some analyst say it may fall to 20.00/barrel. if Obama strikes a deal with Iran, then they would be able to start selling their oil on the market. And they have huge reserves. That would certainly flood the market. Then I heard that Russia was going to start selling more oil as well due to deals with Syria. If this happens then would the price of oil should drop drastically. what is your take on these events.

Q: Could you update on Bonavista, (BNP), especially info on the dividend and why they haven't cut (again) or eliminated it. Any chance of this one going to 0.
Thanks
Doug

Q: It's my expectation BXE will be announcing some asset sales in the near future to help lower their debt. Generally speaking, do you think this will bump the share price up a bit? Thanks.

Q: There has been some insider buying at Baytex in the last little bit. I was wondering if you think this is a positive thing and would you start a position now? Currently have zero exposure to energy.

Thanks

Q: In a previous question, someone asked what drillers would best respond to an oil rebound, you mentioned Precision Drilling PD and High Arctic HWO. What about Trinidad?

thanks,
jb

Q: Hi, Peter
In my question to which oil&gas service company would profit the most from a revival of this industry, you mentioned 4 drillers. So the question is are driller the most prone from all service companies to profit first or there could be other type of service companies that would also participate early in the aforementioned scenario.
Thanks again
Claude

Q: just a comment. surge has been active in the market buying back their own shares. according to the tmx website sgy bought shares every day in sept. except one for a combined total of more than a half million shares so far. its nice to see a company support their shareholders. it seems to be helping the stock some but I realize oil needs to recover but its nice to see a company not so distressed to be able to actually buy back shares.

Q: Hi, Peter
which oil and gas service companies has the most to gain in the event of a oil and gas "revival".
Thanks very much
Claude

Q: do you think husky is ok to buy ?
would you recommend it?
Just wondering why this one has come down so much ,is it only the lower oil price?

Q: Back in July you werent too positive on TDGs short term potential for any sort of increase in price...that was back at $4.20s. Now that we are in the low $2s, do you think this is a buying opportunity, or is debt and earnings going to push this lower?

thanks,
jb

Q: Hi,

What is your assessment of the current situation with TCW and their debt issues? From $13 and change to $.85-ish, it looks similar to BTE (although that could be said of many of the oilco's I suppose). Between BTE and TCW, I think I prefer BTE, it seems to be more oversold, and have a better handle on debt. What are your thoughts on these two?

thanks,
jb

Q: I go into detail because this Question concerns a larger issue related to cash levels investors should allocate to Reserves. Reserve to take advantage of opportunities in volatile times. I will normally be brief when my words need no explanation , background or context.

National Oilwell Varco (NOV.us), ONE company is 8% of my portfolio. The sector represented 20% before I reduced it to 11%. NOV has lost more than half its value (and 70% of my cost). The over-allocation to NOV was the idea of a former broker . I too am at fault: I compounded the error by not rebalancing sooner. I reduced sector allocation but failed to reduce NOV. And now I try to avert my eyes when I see the loss. Problems get worse when ignored.

I arrive now at the 5i doorstep, to obtain objective comment:
In your opinion , since NOV has fallen off a cliff , does it now represent value such that one should just hold? The dividend is decent (if it is safe ; and I can't use the tax loss)

Context: Many financial commentators advise that investors keep high cash reserves during current volatility so that you’d then be in position to pick up great values when markets over-react on the downside. The advice assumes stocks will continue the recent (and rapid) descent . I had thought major markets in the US, Europe, UK and Canada had now dropped enough such that a high cash reserve was now not crucial. Several experts think otherwise: I am referring here to the opinions of successful , real-world investors. I disregard those drama queens who scream dire warnings, no matter the facts, prospects and real business conditions. I also disregard the idiocy of conmen and bullies ---the O’Leary’s of the world--- and others like the affable but hyper Jim Cramers of the Americas. I disregard the opinions of Dr Marc Faber and others whose purpose seems to be to sell expensive letters that predict the end of the world. Their performance is not unlike results you'd get from a random coin toss [CXO Advisory and other sources have documented the poor track records of many gurus..

My question about freeing up cash (by selling NOV in my case) thus arose after I thought through the concerns well reasoned and articulated by thoughtful , successful advisors.

Notwithstanding recent market corrections, the wiser commentators continue to emphasize the importance of maintaining large cash reserves to take advantage of opportunities in these volatile times if markets descend even further. Unlike the sensationalists, the thoughtful advisors make sense . I have therefore taken seriously their views on ensuring one should today keep cash reserves higher than usual

Do you think I should sell/reduce NOV to add to cash reserves ? Or do you think NOV is now excellent value and is not now the best candidate to jettison if the purpose is just to add to cash reserve?

AO:ls
Champlain NY cc Greensboro NC

Q: In a registered account, what do you think about a switch from CPG into WCP? I already have a little WCP in non-registered accounts, but very little oil/gas stocks overall (fortunately!)

Q: Please comment on CFO departure.