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is now the time to invest in oil stocks?

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  • Jun 22nd, 2017 10:31 pm
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Banned
Nov 24, 2013
110 posts
11 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....
6227 replies
Deal Addict
Nov 11, 2004
2688 posts
131 upvotes
I jumped in, last week thinking just this..

Looked like it was 1 week to early..
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Deal Addict
Sep 6, 2010
1616 posts
325 upvotes
Vancouver
Naaaaaaaa just wait that always works out for the best.
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May 11, 2014
1407 posts
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Iqaluit, NT
theredstar wrote:
Dec 1st, 2014 12:54 pm
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.
Newbie
Oct 9, 2012
58 posts
3 upvotes
Buy in anytime after Jan 1, that's what I'm doing.
Deal Addict
Sep 6, 2010
1616 posts
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Vancouver
theredstar wrote:
Dec 1st, 2014 12:54 pm
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.
Sr. Member
Oct 21, 2014
537 posts
283 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
116 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.
Sr. Member
Nov 28, 2010
731 posts
77 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
Sr. Member
Oct 21, 2014
537 posts
283 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.
Deal Fanatic
Dec 27, 2013
5645 posts
1684 upvotes
Toronto
Buy oil short airlines
Member
Nov 8, 2009
360 posts
62 upvotes
daivey wrote:
Dec 1st, 2014 2:15 pm
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.
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Sep 21, 2007
4266 posts
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Winnipeg
so happy i got out of spartan at 3.25 back a few weeks ago.. Gonna buy it again at 2.40.
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May 11, 2014
1407 posts
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Iqaluit, NT
faken wrote:
Dec 1st, 2014 11:27 pm
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.
Sr. Member
Feb 9, 2013
781 posts
82 upvotes
Richmond Hill
Bought more SGY, just ride it off with the monthly dividend

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