Investment Q&A

Q: Do you favour the recent bought deal financing RE completed and would you buy it at this point? Thanks.

Q: Hi Guys,

I have bought Surge Energy over the past 6 months or so and I am down over 50%. One of my rules is to re-evaluate a company if it drops below 2% of my portfolio. If it stays below the 2% limit for a month, I have to invest more to get it back over 2% or sell my position. I have 2 questions:

1) Should the amount I already have invested influence me?
2) Would you buy or sell SGY today? I cannot just hold.

Thanks for your opinion.
John

Q: Hi - with the ETF - CDZ at 20% energy content, how do you view the risks to this ETF regarding these companies not being able to grow dividends in a prolonged and depressed energy environment. Does this change your outlook on CDZ as conservative, diversified dividend-grower ETF in Canada? Or, does this just mean CDZ cleans out the non-growers and looks elsewhere rebalancing to it's "aristocrat" rules as it moves on? Outlook and views on CDZ appreciated. cheers and thanks...

Q: I hold ERF ENB AND VET in my RRSP. Each holding is 5%. Otherwise the portfolio is diversified. I am concerned that ERF is unlikely to recover and (if you agree with TD and DesJardins outlook) I would select an alternative holding to replace ERF or to increase ENB and VET holdings. Please comment. Greg

Q: Stocks such as SES, TOT, PSI and BDI have moved substantially (admittedly in relative terms only) off their lows, which is a bit of a head scratcher. As far as you know are there one or two of these kinds of companies that stand to benefit should the push for LNG occur? Which is, or are, your preferred names in the sector, and why? Thanks as always.

Q: First question from an old mining guy. If you assume,as I do,that the next situation faced (after dividend and capex cuts) for Canadian oil producers will be re-statements of reserves and resources,who's on the casualty list? In other words, have you done a sensitivity analysis to see who's reserves drop from "14 years" to "5 years" at $50 oil?

Q: I'd like to know what your current view is on MCR. In response to a question I posed on Dec 9/14 the answer was "Macro had a very tough year; even before the recent energy sector meltdown, it experienced cost overruns on a fixed cost project, and this destroyed its profit margins. Now, sector retrenchment means there will likely be fewer opportunities for growth over the next two years. But.....it is still profitable, and very cheap. It has some debt, which may be more of a concern if there is not a recovery. After its big drop, we would consider it a hold, but would not buy any more. Note however that its small size now adds some more risks, especially in the short term while the sector tries to stabilize. We think it survives this cycle, but you will likely need to commit to it for another two years."
Yet, in a response to another persons question on Jan 16/15 you respond: "...Both stocks are very, very cheap, reflecting the debt and the sector. As far as survivability goes, much depends on how long the sector situation lasts. MCR, likely, has a better ability to reduce costs, as CET owns its equipment and when business slows it earns nothing on unused equipment. MCR insiders have much more skin in the game than CET insiders.

With the risk of the dividend cut hurting CET, we would reluctantly side with MCR today. But neither looks particularly interesting to us anymore. "

I realize that not the same person answers questions, and there was a period of time between those questions, and now...

What is your current view? Is it worth holding, or time to sell while I can still get something out of it.

Thanks for everything! Love your service!

Q: IAE is down today. Is this a dip to buy some?

Thanks Greg

Q: Could you please recommend two Canadian oil companies that can survive the low oil price environment? I like to buy and hold them until prices go back up again. I do not really care about the dividend as long as the company can use the free cash flow to grow. Does SPE qualify? Thank you very much.

Q: I bought this stock back in Jan. 2013 @ .64 and it is now down to .6…….is there any reason to keep it …..hoping it may come back. Would appreciate any input on this company. Thanks

Q: What is your opinion of (a) Yangarra Resources ltd and
(ii) Ikkuma Resources Corp?
Are they high risk? Good growth potential? Would you consider tem a 'strong buy'? OR would rather buy SPE.to?
Thanks

Q: Since I am down about 50% on Surge am wondering if I should buy more to reduce my costs or go somewhere else like ATD or Parkland Fuel. Opinion please Thanks. Ernie

Q: As they have reported better results than expected does that make the shares seem cheap at this level and are they a buy at this price?

Q: What are your thoughts on this stock.

Q: What is your take on the results and why the drop .. Should I add on this pull back ... Thx

Q: I am thinking that the oil glut is a lot larger than prices are indicating. I base on the very unscientific observation that even with the record long term freezing temperatures in the US, the price of oil seems to actually be dropping(although apparently heating oil is up). In the past, again based only only my recollections, a weekend of cold weather seemed to cause a spike in the price of oil.

I am therefore left wondering if there is too much optimism in oil prices and are we really looking at an extreme glut? Or is all this quite quantifiable and the market probably has it right?

Thanks.

Paul F.

Q: I recently noticed that Acker Finley came out with a model price of 16.83 on this stock which is a bit shocking. Do you have any thoughts on the fair value of this company?

Q: In reference to Sheldon's question (Feb 20th) regarding the recent rise in BDI's share price. It is no doubt partially due to the tax incentives announced by Stephen Harper recently....

"The federal government is hoping to kickstart a multibillion-dollar industry that, according to one analyst, is currently suffering an anxiety attack. Speaking in B.C., Prime Minister Stephen Harper unveiled new tax breaks for investment in liquefied natural gas.

The new measures mean companies will now get a capital cost allowance of 30 per cent for LNG equipment. And 10 per cent for buildings at LNG facilities. The government projects the tax break will save the industry about $50 million over the first five years.

Another estimate says it will allow companies to write off 90 per cent of their investments in seven years, instead of 27."

The above is taken from CBC.ca
http://www.cbc.ca/news/business/lng-tax-breaks-will-help-but-is-it-too-little-too-late-1.2965444

Q: Held on to Legacy and Surge for too long I think. Would you sell and rotate into some stronger names you have mentioned or would you recommend holding? Thank you.

Q: Hello Peter et al.

There was a surprising news release that came out last night on Mart Resources and I have been reading a lot of different speculation into it. Their CEO has been releived of his duties pending and investigation internally. He sold a lot of shares 6M from Dec to early Jan. He is in personal trouble with payments in divorce court with the judge in the UK. They have put the company under strategic review for possible sale etc. They have only just started to get production to higher levels with the new pipeline. Would you please comment on this for me. Is the shares going to crash when the market opens Monday? The uncertainty and speculation because of the strange news release might cause the share price to crater. The risk of Nigeria I guess.

Regards,

Brendan