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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: hello 5i Team,

First, am loving the correction and the opportunities it is providing. With that in mind I would like to hear your thoughts on PRW.

There is tons of commentary regarding the BC LNG proj and the probabilities of it moving forward in the foreseeable future. There is no question it would do much for the BC economy. For every positive comment you hear, there are just as many negative comments stating it may not move forward for many years.

My Questions???? PRW has many projects in the works. How would their prospects be effected IF the LNG project did not go forward in a reasonable time frame? What is you thoughts on whether it will or will not go ahead? And lastly, what are your thoughts on PRW in general (sell, hold or buy) at this time with the pull back in full force?

Thanks for all you do

Gord
Read Answer Asked by Gord on October 13, 2014
Q: hi, is prw a longterm (2yrs plus) buy. thanks.
Read Answer Asked by Dario on October 13, 2014
Q: This looks to be caught in the falling of energy shares in the past couple of months. It pays a high dividend - is it worth accumulating here? Thanks a lot!
Read Answer Asked by Michael on October 13, 2014
Q: Hi 5i: There have been a lot of questions recently regarding oil producers and the apparently ongoing declines in their share prices. It seems people have been having trouble getting their bearings and are coming simultaneously to the questions ‘should I be buying now?’ and ‘should I be selling and exiting the sector?’ With the same thoughts in mind I found it useful recently to look at the 5-yr chart on the WTI oil price. Outside of their own operational issues, successful producers rise and fall with the oil price. The path of the oil price since a trough valuation on May 17, 2010 can be described in terms of the following series of upward “runs” and downward “slides.” Each run or slide represents at least a $15 change in the price of oil and I was interested in how long each move lasted and the magnitude of the price change in each case. This is what the chart says in those terms:
• May 17/2010 to May 2/2011 (nearly 1 year duration) – Trough to Peak run from approximately $70 to $114
• May 2/2011 to Oct 3/2011 (5 months duration) – Peak to Trough slide from $114 to $74
• Oct 3/2011 to February 27/2012 (5 months duration) – Trough to Peak run from $74 to $110
• Feb 27/2012 to June 18/2012 (4 months duration) – Peak to Trough slide from $110 to $77
• June 18/2012 to Sept 10/2012 (3 months duration) – Trough to Peak run from $77 to $100
• Sept 10/2012 Oct 29/2012 (1.5 months duration) – Peak to Trough slide from $100 to $85
• Oct29/2012 to Sept 2/2013 (10 months duration) – Trough to Peak run from to $85 to $110
• Sept 2/2013 to Jan 6/2014 (4 months duration) – Peak to Trough slide from $110 to $91
• Jan 6/2014 to June 16/2014 (5 months duration) – Trough to Peak run from $91 to $107
• June 16/2014 to Oct 10*/2014 (4 months duration – * still going) – Peak to Trough slide from $107 to $85

Of course one has to consider that past patterns do not guarantee future paths and for one reason or another ‘it might be different this time.’ But that aside, a number of observations may be made. In each case the next significant move in the opposite direction followed immediately on the heels of the prior one. The longest slide was about 5 months long. The present slide is nearly 4 months long already, about the same duration as two of the other four slides in the past 5 years. So from that perspective what we are presently experiencing is nothing out of the ordinary and each past similar instance has resolved into a nice run to the upside. Unless it is different this time, 4 months of sliding puts us much nearer to the end of the slide than to the beginning.

In dollar values, the magnitudes of the past slides are (oldest to most recent): $40, $33, $15, and $19. The present move is $22, so far. Again, unless something makes this time different, the present slide will likely end with an intraday trough price somewhere between the present $85 and the previous lowest lows of $74. Again, but in dollar terms this time, that would put us closer to the end of the move than to the beginning.

Overall, I’d note that this particular slide has so far shown us nothing out of the ordinary and for that it should provide us no reason to panic. No good quality producer is put in danger of failing as a business enterprise by virtue of a short term commodity price slide. But it may be important to stress “good quality” in that observation. On the other hand, the shares of even the best quality oil producers have become significantly cheaper during the present slide. Whenever similar share price declines have occurred in the past five years, it has provided a good opportunity to add high quality producers to one’s portfolio (and some very nice ‘Yield on Cost’ numbers as well).

Hope that’s useful to someone!
Read Answer Asked by Lance on October 13, 2014
Q: With the U.S. comments on becoming self sufficient on energy the NEW supply is going to come from shale which has a huge demand on water .The Ogala Aqua for the largest in the US has been depleted down to 20 per cent this depletion took place in the last 20 years a result of growing vast amounts of subsidized corn for ethonal production .
My opinion is that the jury is still out on fracing and I am not prepared to write off Canaidian oil and gas as a major supplier to the U.S. market.
Kind regards Stan
Read Answer Asked by Stan on October 10, 2014
Q: https://www.google.com/url?rct=j&sa=t&url=http://business.financialpost.com/2014/10/09/peter-foster-look-whos-demonizing-canadian-oil/&ct=ga&cd=CAEYBCoUMTM4MzI4MDkyMTIyODQ5NTU3NDUyGTlkYWUyYWQxMjY0MDFlY2M6Y2E6ZW46Q0E&usg=AFQjCNGwShKkotWE0qYczudb26li4x9bCQ

Mr. Hodson, is the movement mentioned above likely to hurt seriously the oil sands companies referred to ?
Read Answer Asked by Serge on October 10, 2014
Q: BXE - i have invested a lot in this company but can you explain the following comment from a recent BNN commentator as i have not read any details about this concern here or on any investment blogs …thx

"Very cheap. Had third party facility problems. Their own won`t be ready until spring. They can`t get their product to market. It is absolutely excellent value here. It may take into next year to rebound”.
Read Answer Asked by Bob on October 10, 2014
Q: Hi Peter
Rock Energy is down almost 30% since its top in August and crossed already MA 200 it looks very familiar to situation from April 2011 when Rock Energy plummeted from $6.16 to $0.86. Do you think is time to sell or there is something else going on with Rock Energy.
Thanks Andrew B.
Read Answer Asked by Andrzej on October 10, 2014
Q: CPG has been on a steady decline for the last two weeks. Right now it is sitting at $37.28, which is at the 52 week low.

I know you do not have CPG in your portfolio, but I am wondering if you can shed some light? Is CPG reflecting the movement withing the sector, or is this a sign of other more alarming issues?
Read Answer Asked by Patricia on October 09, 2014
Q: Hi Peter and Team

I would like your opinion on the energy sector stocks. I am as most canadians heavily into financials and insurance. present energy weighting = zero.

I am by nature conservative with investments and fundamentally a dividend oriented investor and would appreciate your advice on 3 to 5 "energy sector " stocks with good company / business fundamentals and a track record of maintaining dividend payouts, that you believe will get through the present energy sector / oil price drop. (track record of getting through previous dips and lulls in energy sector is also desired.)

depending on my "greed" scale perhaps breaking down the choices into yields > or < 5 %.

my timeline horizon is long (looking mostly to buy and hold)

Thanks

Henry
Read Answer Asked by Ernest on October 08, 2014
Q: Hello: I have SGY, PEY AND GEI and wonder now with this area in correction if you would suggest names to add to my portfolio.
Read Answer Asked by Barbara on October 08, 2014
Q: With the pasting in the markets, I am looking to raise some cash to purchase some higher yielding stocks such as BTE, COS etc when they appear to be reach the bottom. Accordingly I am thinking of selling DH and MIC. Both of done nicely for me but for the most part I see limited capital appreciation opportunity with them. See anything wrong with this thought process?
Read Answer Asked by Mark on October 08, 2014
Q: Watching the market drop daily and many of my "paper gains" evaporate I wonder if a few STOPS would not have been appropriate? I stay away from STOPS to avoid being stopped out in a "flash" crash.

Still sitting on the same stock I owned a month or two ago. Nothing has really changed for those companies except some panic in the markets and the price of crude oil has dropped. Fall is generally the point in the year when the price of crude oil drops and this year is no different.
Read Answer Asked by Ronald on October 08, 2014
Q: Hello 5i team,
Which 3 of the following 5 energy producers would you select and why?
Baytex BTE, Crescent Point CPG, Tourmaline TOU, Vermillion VET and Whitecap WCP.
Thanks,
Tony
Read Answer Asked by Antoine on October 08, 2014
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