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is now the time to invest in oil stocks?

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Banned
Nov 24, 2013
110 posts
40 upvotes
Thornhill, ON

is now the time to invest in oil stocks?

I am thinking of investing in oil stocks. But with oil's big drop, i am afraid that big names like suncor, canadian natural resources, canadian oil sands might go bankrupt and my investment worthless....
13109 replies
Deal Addict
Nov 11, 2004
3503 posts
614 upvotes
Ottawa
I jumped in, last week thinking just this..

Looked like it was 1 week to early..
Hello
Deal Addict
Sep 6, 2010
2029 posts
804 upvotes
Vancouver
Naaaaaaaa just wait that always works out for the best.
Deal Fanatic
User avatar
May 11, 2014
6580 posts
9086 upvotes
Rankin Inlet, NU
theredstar wrote: I am thinking of investing in oil stocks. But with oil's big drop, i am afraid that big names like suncor, canadian natural resources, canadian oil sands might go bankrupt and my investment worthless....
They probably won't go bankrupt. Case in example....

when oil dropped in the 90s to like about $10, dividends were still raised by major players (eg. Exxon, Imperial etc.)

Oil is still relatively high enough for these companies to survive. Will they cut exploration and costs? probably. They will probably borrow money too. Will they recover? Yes, in 1 year... or maybe 10.
Member
Oct 9, 2012
217 posts
111 upvotes
SK
Buy in anytime after Jan 1, that's what I'm doing.
Deal Addict
Sep 6, 2010
2029 posts
804 upvotes
Vancouver
theredstar wrote: I am thinking of investing in oil stocks. But with oil's big drop, i am afraid that big names like suncor, canadian natural resources, canadian oil sands might go bankrupt and my investment worthless....
Good one, this isn't serious, tell me a novice investor doesn't even believe this. It's a wonder some people ever invest in the stock markets.
Deal Addict
Oct 21, 2014
1936 posts
2932 upvotes
Burlington, ON
ilusa - You can always say that you jumped in too early or late, but you won't be saying that if you're still holding in May once driving season starts up. Oil prices are cyclical, low prices will cause a shakeout in the sector which will cull some of the weaker players taking them offline and bringing prices up again.

Personally, I bought a bunch of Husky due to it's low leverage, low cost/bbl and diversified holdings. You must realize that the big players are hedged against oil price drops and produce other things like natural gas and have refinery operations which consume their own oil. While I'm willing to write off every penny I invested if it comes to it, I seriously doubt I will be doing so.
Sr. Member
May 5, 2010
971 posts
119 upvotes
Now would be a good time to add small blocks to a new position. Average down if it continues to fall, average up if things improve. I (totally subjective) that in the long term it will be better than the point it is at now.

+1 on Husky (yield approaching 5), low industry PE. Not sure why there's so much mention of BTE.
Deal Addict
Nov 28, 2010
1374 posts
345 upvotes
Brampton
I'm thinking of adding to my Cos position, just not sure if should wait longer. I thought I was getting in at a good time when it was $15.35 but now it's $2 lower
Deal Addict
Oct 21, 2014
1936 posts
2932 upvotes
Burlington, ON
tbh, the low oil prices could spur economic growth which increases oil usage while at the same time killing off weak players, but it might take a while.

Prices will recover, but the question is when. If I were to advance some advice, if you are buying in energy - buy larger players who have had their stock prices battered by low oil prices and who are diversified in refining or retail and can better weather the downturn. Wait for prices to recover and profit.

But certainly do not put money in to the energy market which you will need anytime soon.
Penalty Box
Dec 27, 2013
8003 posts
4050 upvotes
Toronto
Buy oil short airlines
Sr. Member
Nov 8, 2009
534 posts
277 upvotes
daivey wrote: Buy oil short airlines
Worst advice I've heard...at least in the short term being 6 months out. Airlines have not fully priced in the oil drop and will likely continue their ascent due to momentum and seasonal trading. Best time to short airlines is probably after January. As for oil I'm not gonna say it's a bad time to buy but I think it's prudent to wait it out since it's not like oil is gonna spring back to $80 a barrel anytime soon. We have a glut of oil that will take months to clear out while oil growth will continue due to capital expenditures made already. The way I see it, oil's upside at the moment is maybe $5 while the downside could be another $30.

As for the people who do want to buy oil stocks, I highly recommend not going after oil stocks that have been beaten down the most. Stick with Suncor, CNQ and other low cost producers that don't have a huge dividend. If oil does go down to $60 like many predict BTE, COS, SGY, LRE, TBE etc will end up cutting their dividend and won't hold it's value as well as Suncor and CNQ. In fact at least a few of those I've mentioned to avoid are likely going to have to cut their dividend if prices remain at the $70 range.
Deal Guru
User avatar
Sep 21, 2007
13019 posts
11361 upvotes
...
so happy i got out of spartan at 3.25 back a few weeks ago.. Gonna buy it again at 2.40.
"An essential aspect of creativity is not being afraid to fail." -- Edward Land
Deal Fanatic
User avatar
May 11, 2014
6580 posts
9086 upvotes
Rankin Inlet, NU
faken wrote: so happy i got out of spartan at 3.25 back a few weeks ago.. Gonna buy it again at 2.40.
Spartan would be a great play long term. Their specialty is buying out troubled assets. My guess is deals will be abound for Spartan's executive team.
Deal Addict
Feb 9, 2013
1909 posts
1310 upvotes
Mississauga
Bought more SGY, just ride it off with the monthly dividend
Deal Addict
Jan 3, 2013
2806 posts
1152 upvotes
Sidney
jdu0ng wrote: Bought more SGY, just ride it off with the monthly dividend
Ballsy. I dollar averaged at $5.20....I don't think I can pump any more into this one though. :(
Deal Addict
Feb 9, 2013
1909 posts
1310 upvotes
Mississauga
SheaButters wrote: SGY is next in line to cut their dividend
You're backing this statement by...?
Deal Addict
Nov 29, 2005
1290 posts
184 upvotes
Winnipeg
OPEC knows they'll need to keep prices low over several years to sink the other global players. For it to only last a few months there will be little to no impact and their recent efforts will be for nothing. Once things normalize with low prices and dividends are no longer cut or y/y profile drops aren't as substantial then i'll be looking to jump in.
Deal Addict
Sep 6, 2010
2029 posts
804 upvotes
Vancouver
LOL @ waiting until tomorrow...looks like it cost you a few percent.

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