Investment Q&A

Q: Good day. I would first like to thank you for your service and unbiased advice. It is a great service and I have been very happy with everything you do.

This is mostly a strategy question regarding portfolio allocation in regards to too much energy sector exposure.

I have had to much exposure to energy mostly due to my wife receiving options and some private investments that went public. With your advice I have been adding exposure to other industries, but I am still heavy with energy. I am patient and don't mind waiting out the ups and downs.


Do I take and loss now and re-allocate to other sectors?

Do I keep these stocks and wait for the market to come back?

Do I leave these stocks but stay in the sector and add BDI or Surge?

Basically, if other companies may improve better than the current listed stocks, do I take my licks now and move on. I am underwater on TEI, LXE, but I am a bit above with PGF.

I am overweight PGF and TEI. LRE I received through Crocotta, and I don't know if it can weather this storm?

I am a long term investor and I am sometimes too patient.

Thanks again for you guidance.

Q: I am investigating this one. It is at about half book, more out of favor than its sector, appears to have lots of upside if you look at 52wk range but a nasty looking multi-year chart. I would appreciate any knowledge you could share on this one. Should it survive $35 oil if oil goes there. Is something broken in this company that you are aware of. Many thanks for a great service.

Q: I have already been reducing my financial weighting and doing some rebalancing - and not just because TD decided to take their own sweet time with the dividend! My current Energy sector weighting is 7.7% with the banks...well you know I'm your typical Canadian. I'm thinking on increasing the Energy weighting to roughly 10% by adding to existing positions in PEY, VET and a good oil reserve modelling company. Lately when I read the questions I get the sense you are advising against the purchase of energy companies yet rebalancing (selling the overweight to buy the underweight) seems to be a good strategy. I guess I am a little confused - should I delay rebalancing until the Energy sector is less volatile?
Thanks

Q: Thanks for your reply to my question on Elkwater. Did you mean Elkwater is (not) planning much spending in the first quarter?
Thanks.

Q: Sgy has really come down since Nov. They had a fairly large hedge to price of oil --about 40% at $80 to $90. Are these hedges actually enforced or do they renegociate new prices which are not revealed. It seems hard to believe the share price of many stocks IF the hedge price is really used? Could you find out the hedge price used for stocks?

Q: With John O'Connell from Davis Rea joining Elkwater's Board at their annual meeting on Feb. 19, and bringing 70 million shares, insiders will own 25% of the stock according to the recently mailed circular. They are consolidating the shares and changing the name to Striker Exploration, for some reason.
The stock has been under pressure - small oil play in a lousy market - but I am wondering if sellers are anticipating a financing and selling out to participate and obtain warrants.
The Board is very strong and experienced which gives confidence to shareholders.
My question is do you see any value here for a 3 year time horizon and is there a large short position?
Thanks.

Q: Potential for further upside in near term? Thanks.

Q: Could I get your opinion on the above co.Thanks Jim

Q: The sector still looks volatile, but with some recent gains on these target buys (RE,WCP,RMP and RRX)it's tempting to jump in. You've mentioned that there is still no true signs of recovery in the sector (Jan 28), what exactly should I be looking for as a true sign of recovery?

Q: Which one of the two would you perfer?

Q: Hi Peter,

I have followed this energy play for many years. It looks immediately in the buying range from what I see considering a 5 year cycle. What are your thoughts on this one or alternatives to it? Thank you again.

Q: There is currently a proxy fight for this company in which (sadly) I own shares. I've read the filings in which both sides try to tar the other. Do you consider either side more credible than the other?

Q: Do you think it is time to add oil and gas stocks? If so, which are your 3-4 favourites?

Thanks Dave

Q: Hello Team,
I have purchased TOG at $15.00 per share it is currently at $8.90 per share. Do you see more upside or should I sell and cut my losses. Thank you very much.
David

Q: Hi Peter, Do you think the persistent low oil prices will affect LNG price? LNG export to Asian countries is profitable as long as there is a significant amount of price differential of NG between the exporter and the importing countries. Cheniere Energy (LNG) will be exporting later this year from Sabine Pass. I have significant gain from LNG. While it has not pulled back to my trailing stop to trigger a sell, under this environment, do you think it is wise to reduce or sell this position and move on to other growth areas? Various analysts have diametrically different opinions on this from "great time to buy with this pull back" to "a scary overvalued stock to sell". My best regards.

Q: Good morning 5i team,
In december i sold surge energy for a cap loss and bought Whitecap to replace it. It is now time to buy Surge back again but i have been leaning towards keeping Whitecap instead. Am i right in thinking that you seem to show more confidence in Whitecap than Surge?
Thanks

Q: Hi Folks,

Thanks for your great work!
I don't want to abandon the energy space completely as it will bounce back. I'm thinking of sticking with PPY and DEE while waiting for the turn - naturally I'm down a lot in both. They probably won't disappear and could experience a quick and substantial rebound when energy comes back. I'm a long term investor with a balanced portfolio. What do you think of this strategy and these two companies?

Q: Hello Peter:

I decided to buy a small quantity (200 shares) of the HOD ETF to hedge a bit against my oil stock holdings (Ithaca, Iona, Surge and Freeport McMoran). It fell hard yesterday with the news of the 8% cut in drilling rigs on the continental US. I am still expecting the oil price to fall further between now and the next OPEC meeting on June 5th.

My strategy is that I will use the gain that I will get in HOD to eventually buy more of my oil stocks when the oil market turns around. If OPEC in June does not cut their production then the oil price will fall much further before it bounces back. The U.S. inventories have gone up in the last two weeks at unbelievable levels - 10.7M two weeks ago and 8.2M last week. The reduction in rigs will not have a quick effect on the U.S. daily production numbers for at least 6 months. I believe yesterday's bump inthe oil price is a bit of an over reaction and will go down again next week when the inventory numbers come out for last week.

When you look at the HOD it states that it is a daily calculation based on the WTI price. How does the ETF actually work because it has increased more than the stated 2 times the drop in oil price? If my hedge is wrong I will still be very happy because my oil stocks will go up instead. I am banking on a increase in the oil price 2 to 3 years from now so I am not concerned about this blip but would like to hedge a little bit right now to make some money on the downside trend. What is your opinion of this strategy?

Thanks,

Brendan

Q: 1/30/15 - Oil had a big move up of $3.75. Most oil stocks moved up with the oil move - example - SGY up 10.3% - 3 stocks you support ROCK, PRW and QST moved down. Any explanation why didn't participate in the rally?

Dennis

Q: From what I've read today (01/02/15) it seems the reason why oil appreciated on Friday is because of the strike by "USW". It's a nation wide strike. If I remember correctly the last time the "USW" went on strike an agreement wasn't reached until after a month. If this is the reason why oil spiked on Friday what do you make of it?