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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: You answered a question the other day about Cardinal Energy suggesting they were highly leveraged at 4x cash flow. Their presentation at $50 WTI and a .80c Cdn dollar, suggests they are just above 2x cash flow not 4X , that their POR is 40% regarding the dividend. Since 2014 and thru much lower oil prices they have kept that ratio between 31 to 49%, given the higher oil prices now it seems to be sustainable. WTI now exceeds their guidance as well as the CDN dollar at .77c they should be in fine shape on both counts. The company is looking at increasing amounts of free cash flow in 2018 given where WTI is today and the exchange rate, not to mention the WCS differential which is in their favour as well. Cardinal has one of the lowest decline rates in the industry so can spend less on maintaining or growing production as well. Those numbers you used look more like Bonterras- BNE then Cardinals. I don't understand where you are getting your numbers, please help me understand?
Read Answer Asked by Wyatt on November 02, 2017
Q: I am considering to re-enter the energy market. Of the four stocks here, CJ, WCP, VET and TOG, how would you rank them in terms of their potential combined returns (growth + dividends, and dividend sustainability). Thanks.
Read Answer Asked by Victor on November 01, 2017
Q: I used to own CJ and with the downturn in the energy market I sold all my O&G holdings along with CJ. I just noticed in the last week or so that insiders who already own substantial shares in CJ have been adding more company's stocks to their portfolio.

Can I used a horse betting analogy of "following the trainer to the betting window" here? I notice the company has already cut its monthly payout by half earlier this year (since 2/2017). Is this payout at a rather enticing level (still about 8%+) sustainable based on its current production level? Do you foresee further dividend cuts?

Thanks for your insight.
Read Answer Asked by Victor on November 01, 2017
Q: Hi there,

I am in a losing position with Cardinal on what is a small level of energy exposure in my portfolio. Do you think the dividend is safe or ripe for a cut? Also, the name has fallen considerably more than RRX, WCP etc. I understand that they have more heavy oil production which may weigh on the stock. If I wished to maintain energy exposure would you suggest switching to a different producer? If so, who? I also own Spartan.
Read Answer Asked by Tim on July 21, 2017
Q: With oil down, what would be your top picks for a rebound when oil picks up, without being too leveraged? I was thinking of Cardinal, with its nice yield (do you think it will need to be cut?) I already have some Spartan, but it seems to be a well run company. Other choices that are on sale? Thanks.
Read Answer Asked by Donald on June 08, 2017
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