Q: What is the best method for an average investor to hedge these low energy prices for our benefit at the pump long term
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Investment Q&A
Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.
Q: I realize that forecasting the bottom of oil prices is not possible, but just for fun, if you think oil will see $40 and possibly less, would you sell your various oil holdings now - bte, cpg, sgy etc, even if you have a 50%+ loss??
Q: In your opinion, what five Canadian oil companies will survive the downturn in oil prices. Thanks
Q: How can I find out how long are those accormodation contracts? Can customers terminate the contracts in 2015? Thx
Q: Happy new year! I was hopping to get your opinion on BXE as oil prices continue to be going lower. Whether it would be a buy, sell or hold? If the sector recovers, will this name be possibly still around? Thanks.Lin
Q: The market has now pushed SGY to a 20% dividend yield. Have any of the compnay fundamentals changed or is this just the ongoing energy sector crash? Do you have any guesstimate as to how much a dividend cut might be and do you think the stock will rebound a bit after the cut, independent of the status of oil price?
Thanks again! John
Thanks again! John
Q: Morning or should I say mourning ... although I am expecting a large dividend cut can you tell me if Surges stock price could actually go under $2 and if the company is strong enough to withstand this pounding?? Is it a takeover candidate? Thanks as always.
Q: BDI seems to be settling down somewhat after recent severe weakness. Do you think it is advisable to dip a toe in the water on this name in a TFSA? Realizing that patience will be required and more volatility may follow of course.
Q: Should I add to existing long term positions in essential energy services and/or total energy services at this time. I am a long term investor and not disturbed by short term volatility. Thanks!
Q: Happy new year!
I am thinking about adding RE and SGY....
Could I have your opinion please.
Thank you!
I am thinking about adding RE and SGY....
Could I have your opinion please.
Thank you!
Q: hello, i was hoping to get your latest opinion on crescent point as oil prices continue to look to be going lower. wether it would be a buy, sell or hold. or any expert opinion you have. also i would like to ask the same of Raging River TSE.RRX . thank you. also with oil prices lower, are there any buys in this sector that look attractive ? thanks for your time. - Brian.
Q: Below is an email received from my discount broker TD and wonder if you could shed some light on it.
If in fact this is valid could you provide some details and recommendations on companies that would be appropriate for an RRSP
Monday was another day of falling oil prices and energy stocks. Yet the great slide in oil prices has also created an irresistible opportunity, says Hanif Mamdani, lead manager of the $3.6-billion PH&N High Yield Bond fund with RBC Global Asset Management: Energy bonds are on sale for bargain prices.
Specifically, Mr. Mamdani, one of Canada’s shrewdest fixed income investors, has been drawn lately to the senior debt of high quality, Canadian oil patch firms he believes have the balance sheet, management intelligence and experience to ride out the effects of the ongoing oil supply glut. He won’t disclose what or how much he’s bought but says it’s “material.” “It’s turning into a fairly compelling opportunity,” Mr. Mamdani says.
Here’s how he sees the play in the oil patch: spreads on senior bonds for firms such as Precision Drilling Corp., Baytex Energy Corp., Western Energy Services Corp. and Trilogy Energy Corp., have jumped by between 300 and 500 basis points since July, giving them annualized yields of nine per cent to 11 per cent. In many cases, the bonds come due in four to five years.
“These are solid companies that have very reasonable balance sheets,” he says. “Many of them generate free cash flow even at [current] crude oil prices. They’re run by extremely competent managements that have been through many cycles and have vast amounts of their own wealth invested.”
In some cases, low oil prices don’t have a uniformly negative impact. Take Precision: it has slashed capital spending plans, but while it isn’t spending money to build new rigs, it will continue to collect cash for rigs already in service. That can be used to retire debt or support its dividend. “At some point people will realize Precision bonds are yielding 10 per cent for a company with low leverage,” he said.
In other words, a compelling opportunity: all investors have to do is buy the bonds and hold them to maturity, and they will earn nine per cent or more so long as the companies don’t default. Should oil prices rise, risk premiums fall and the bonds appreciate in value, those returns could rise to as high as 20 per cent, Mr. Mamdani figures.
And how likely is a rebound in oil prices in the next four years? Consider the precedent, says Mr. Mamdani: Low prices should crimp supply and stimulate demand, while economic growth sops up the surplus. The price of oil may not have bottomed, “but to assume [the very bottom] will be the time to buy energy stocks and high-yield bonds is naive,” he says. By then it will be too late.
If in fact this is valid could you provide some details and recommendations on companies that would be appropriate for an RRSP
Monday was another day of falling oil prices and energy stocks. Yet the great slide in oil prices has also created an irresistible opportunity, says Hanif Mamdani, lead manager of the $3.6-billion PH&N High Yield Bond fund with RBC Global Asset Management: Energy bonds are on sale for bargain prices.
Specifically, Mr. Mamdani, one of Canada’s shrewdest fixed income investors, has been drawn lately to the senior debt of high quality, Canadian oil patch firms he believes have the balance sheet, management intelligence and experience to ride out the effects of the ongoing oil supply glut. He won’t disclose what or how much he’s bought but says it’s “material.” “It’s turning into a fairly compelling opportunity,” Mr. Mamdani says.
Here’s how he sees the play in the oil patch: spreads on senior bonds for firms such as Precision Drilling Corp., Baytex Energy Corp., Western Energy Services Corp. and Trilogy Energy Corp., have jumped by between 300 and 500 basis points since July, giving them annualized yields of nine per cent to 11 per cent. In many cases, the bonds come due in four to five years.
“These are solid companies that have very reasonable balance sheets,” he says. “Many of them generate free cash flow even at [current] crude oil prices. They’re run by extremely competent managements that have been through many cycles and have vast amounts of their own wealth invested.”
In some cases, low oil prices don’t have a uniformly negative impact. Take Precision: it has slashed capital spending plans, but while it isn’t spending money to build new rigs, it will continue to collect cash for rigs already in service. That can be used to retire debt or support its dividend. “At some point people will realize Precision bonds are yielding 10 per cent for a company with low leverage,” he said.
In other words, a compelling opportunity: all investors have to do is buy the bonds and hold them to maturity, and they will earn nine per cent or more so long as the companies don’t default. Should oil prices rise, risk premiums fall and the bonds appreciate in value, those returns could rise to as high as 20 per cent, Mr. Mamdani figures.
And how likely is a rebound in oil prices in the next four years? Consider the precedent, says Mr. Mamdani: Low prices should crimp supply and stimulate demand, while economic growth sops up the surplus. The price of oil may not have bottomed, “but to assume [the very bottom] will be the time to buy energy stocks and high-yield bonds is naive,” he says. By then it will be too late.
Q: http://email.seekingalpha.com/track?type=click&mailingid=2798555&messageid=2800&databaseid=&serial=2800O2798555O1420497134.b35c9666ac01032ec25c6b2b2ec0e005&emailid=1079842&userid=1079842&extra=&&&3000&&&http://seekingalpha.com/article/2798555-canadian-oil-sands-5-price-target?source=email_rt_article_readmore&uide=1079842&uprof=46
Mr. Hodson, does this January 5, 2015 article by Mark Liew make sense ? COS at 5$ and eventually no dividend at all. In a complete chaos situation, everything is possible, but anyone can imagine anything. What is a common sense likely outcome ? Otherwise, I believe COS' reserves are there for 40 years or more, not 20 years. And what's the value of long time predictions when the overall context may change in a year or two ?
Mr. Hodson, does this January 5, 2015 article by Mark Liew make sense ? COS at 5$ and eventually no dividend at all. In a complete chaos situation, everything is possible, but anyone can imagine anything. What is a common sense likely outcome ? Otherwise, I believe COS' reserves are there for 40 years or more, not 20 years. And what's the value of long time predictions when the overall context may change in a year or two ?
Q: Please provide your recommendations for Bri-Chem. At current price do you recommned an investmen in this company?
Do you know the level of debt of the company and asscoiated risk. Do you think company can survive in low commodity price environment ? If I would like to select one company in Oil Field Service sector which is the one 5I recommends and why?
Do you know the level of debt of the company and asscoiated risk. Do you think company can survive in low commodity price environment ? If I would like to select one company in Oil Field Service sector which is the one 5I recommends and why?
Q: To my understanding, prairie sky earns revenue by activity on it's properties. Do you know percentage of nat gas verses oil on the lands. I would imagine that revenues would be less because of less activity on their land. Would they have less revenue per mcf of nat gas and per barrel of oil extracted from their property because of lower prices. Some of the gold streamers (i.e.: Franco Nevada) have been insulated from lower gold prices. Could psk be insulated from lower gas and or oil prices disregarding sentiment toward the sector.
Q: Hello 5i staff, I have a position in Whiting Petroleum as a result of a takeover. It is about 1% of my portfolio. I am overweight CDN energy names. Could you please take a quick look at Whiting? Is it a decent name to hold for potential sector recovery? If it is not a hold could you please suggest a US etf ( non energy) that might have better potential for growth? Thanks as always, Frank
Q: Whitecap in your modelportfolio is not rated and there's no report yet, but I'm wondering whether to go ahead and sell Baytex and replace it with Whitecap. Would WCP be the better holding for a recovery in oil prices, as well as for the long term?
Thank you!
Thank you!
Q: Hello.
What would be the impact to Russel Metals if they experienced a decrease in demand for their Energy Products sector? Do you think management would 'adjust' well? Do you see this as a real risk?
Looking at their annual reports & their 3 main segments from 2005 to 2014, revenue has declined from Metals Service and Steel Distributions, while revenue from Energy Products has increased steadily from 23% of revenue in 2005 to 46% in 2014 (Q1-Q3).
Regards, David
What would be the impact to Russel Metals if they experienced a decrease in demand for their Energy Products sector? Do you think management would 'adjust' well? Do you see this as a real risk?
Looking at their annual reports & their 3 main segments from 2005 to 2014, revenue has declined from Metals Service and Steel Distributions, while revenue from Energy Products has increased steadily from 23% of revenue in 2005 to 46% in 2014 (Q1-Q3).
Regards, David
Q: Hi peter I recently read a "research report" citing the wrong dividend yield for COS. At the current price of $10 and change and the annual yield at 80 cents annually the yield is around 7.5% give or take a basis point or two. I mention this because at these levels a yield in this range is sustainable even at oil $52/barrel. Do you agree? Do you see another quick leg down for oil prices only to spring back up to the magical prices area just below where most shale producers are still losing money (65). Thanks.
Q: Hi team -
How do you like Trican Well Services in this current environment? How much of a negative is their exposure to Russia? Would you think that any potential dividend cut would be already possibly priced into the stock?.
Thanks.
Jim
How do you like Trican Well Services in this current environment? How much of a negative is their exposure to Russia? Would you think that any potential dividend cut would be already possibly priced into the stock?.
Thanks.
Jim