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What did you buy? What might you buy??

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  • Oct 16th, 2018 1:49 am
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Deal Fanatic
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Oct 9, 2008
5251 posts
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Thornhill
Entered SELL for remaining 1/2 position in Sberbank Rossii PAO - ADR(OTCMKTS:SBRCY) @ $18.30 exp. end of day.

Revised lower to $18.25

Filled @ $18.26 US

--

Sold existing Energy Transfer Partners LP (NYSE:ETP) for a loss @ $19.76 US
Member
Jun 28, 2016
267 posts
139 upvotes
jackrabbit000 wrote:
Jan 11th, 2018 11:13 am
I'm still holding it for now.
Like I said, I kept half. What I'm really trying to do is pare down my position from 40% of all the equities I own being E&P, oil services or pipelines (I accumulated like crazy last summer and fall) to something more like 20-25% by the end of this quarter. The EIA is predicting a 300,000 bpd drop in global crude inventories through Q1 (but then a very bad Q2 and Q3 for global inventories) so I suspect E&Ps will be good holds until at least early April. However, the extremely high net length in oil futures means that any bad news for oil prices could trigger a far bigger unwind of bullish positions than the news might warrant, so I'm slowly reducing my own exposure a bit earlier by selling half positions in stuff that's up 20% or more from my average cost.

My price targets for unwinding the remainder of my E&P positions are book value for CPG ($17-18), book value for CVE ($16) and $10/share for RRX. I'm also holding positions in Tourmaline (primarily a gas producer, which I'm not interested at selling at all below $30/share), Whitecap Resources (plan to sell half at $10.50 and hold the rest unless it tops $13 this year) and Imperial Oil (not interested in selling below $45/share, which it probably will not reach this year) as well as Trican Well Services (sell half above $5 and hold the rest unless the yield curve inverts). If oil prices move up, I might change some of my price targets, but, for now, this is my tentative plan for this quarter.

I also have ENB, ENF, IPL... etc... but I'm not interested in selling any of my pipelines near current levels.
Deal Fanatic
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Oct 9, 2008
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Thornhill
Sold remaining Alliance Data Systems Corporation(NYSE:ADS) @ $271.9901 US

Sold remaining Discover Financial Services (NYSE:DFS) @ $79.52 US

Sold entire Vulcan Materials Company (NYSE:VMC) @ $135.0401 US

Sold entire Synchrony Financial (NYSE:SYF) @ $39.48 US

--

Fully re balanced and sitting on 89.13% US cash
Newbie
Dec 10, 2017
7 posts
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Bought ac @ 23.58, cjr.b @8.97, ENB @49.22, fts@44.25 - holding for long on those.
bought small amount of HmmJ @ 44.25 just cause
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Feb 3, 2011
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Jeenyus1 wrote:
Jan 11th, 2018 12:00 pm
Sold remaining Alliance Data Systems Corporation(NYSE:ADS) @ $271.9901 US

Sold remaining Discover Financial Services (NYSE:DFS) @ $79.52 US

Sold entire Vulcan Materials Company (NYSE:VMC) @ $135.0401 US

Sold entire Synchrony Financial (NYSE:SYF) @ $39.48 US

--

Fully re balanced and sitting on 89.13% US cash
Is there an indicator or event you are waiting on before reinvesting that cash?
Baaaaaaaaa!
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Thornhill
sharpshooter88 wrote:
Jan 11th, 2018 1:54 pm
Is there an indicator or event you are waiting on before reinvesting that cash?
I don't like the risk/reward holding winning positions into the Sixth Round of NAFTA Negotiations from January 23-28, 2018 just in case. I'm also sick with what I believe to be early symptoms of the flu so I have to take it easy for the next while until I'm well again.
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Feb 7, 2014
421 posts
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Jeenyus1 wrote:
Jan 11th, 2018 3:00 pm
I don't like the risk/reward holding winning positions into the Sixth Round of NAFTA Negotiations from January 23-28, 2018 just in case. I'm also sick with what I believe to be early symptoms of the flu so I have to take it easy for the next while until I'm well again.
I thought that the 6th round NAFTA negotiations are going to bring about a black swan event for the canadian equities .. not so much USA. No ?
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Flowerp wrote:
Jan 11th, 2018 3:13 pm
I thought that the 6th round NAFTA negotiations are going to bring about a black swan event for the canadian equities .. not so much USA. No ?
Up to each individual to handicap. Personally, I was putting to work almost 100% of my cash in equities with gains across the majority of positions I felt it prudent to take gains. In the event I lose out by not participating with gains on positive news related to NAFTA, I'm still holding a position in DUST @ Direxion Shares Exchange Traded Fund Trust (NYSEARCA:DUST) @ $23.4844 U which in theory should see upside as FOMO/risk-on should be preferred vs. gold but it's dependent on however the market decides is the most important relationship between X and gold every day.

If I held winning positions into NAFTA downside event then I can possibly face drawdown. If I cap gains leading into the NAFTA event and if there is a downside event, I buy into weakness in a global reflationary trend with low interest rates and improving economics. Losing out on possible gains is a lizard-brain idea lots of people suffer that's not important, whereas making or losing money is important.
Member
Feb 11, 2013
481 posts
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BC
Wavelet wrote:
Jan 11th, 2018 11:50 am
Like I said, I kept half. What I'm really trying to do is pare down my position from 40% of all the equities I own being E&P, oil services or pipelines (I accumulated like crazy last summer and fall) to something more like 20-25% by the end of this quarter. The EIA is predicting a 300,000 bpd drop in global crude inventories through Q1 (but then a very bad Q2 and Q3 for global inventories) so I suspect E&Ps will be good holds until at least early April. However, the extremely high net length in oil futures means that any bad news for oil prices could trigger a far bigger unwind of bullish positions than the news might warrant, so I'm slowly reducing my own exposure a bit earlier by selling half positions in stuff that's up 20% or more from my average cost.

My price targets for unwinding the remainder of my E&P positions are book value for CPG ($17-18), book value for CVE ($16) and $10/share for RRX. I'm also holding positions in Tourmaline (primarily a gas producer, which I'm not interested at selling at all below $30/share), Whitecap Resources (plan to sell half at $10.50 and hold the rest unless it tops $13 this year) and Imperial Oil (not interested in selling below $45/share, which it probably will not reach this year) as well as Trican Well Services (sell half above $5 and hold the rest unless the yield curve inverts). If oil prices move up, I might change some of my price targets, but, for now, this is my tentative plan for this quarter.

I also have ENB, ENF, IPL... etc... but I'm not interested in selling any of my pipelines near current levels.
Do you really think CPG will hit $18? and how far ahead is this target for? I'm sitting at CPG cost of $21 and not sure when to write this off..it hurts. It was up at $11 few months ago and with oil hitting close to $64, shares are still not high enough.
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Feb 21, 2010
645 posts
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Scarborough
CPG is dead money, I think they will have another equity raise this year. Payout is 100% of cash flows for 2018. This is based on current oil prices and good thing is portion of sales is hedged. But if capex estimate changes, board will raise equity rather than cutting dividend - see last two instances
Pursuit2013 wrote:
Jan 11th, 2018 3:41 pm
Do you really think CPG will hit $18? and how far ahead is this target for? I'm sitting at CPG cost of $21 and not sure when to write this off..it hurts. It was up at $11 few months ago and with oil hitting close to $64, shares are still not high enough.
Sr. Member
Feb 21, 2010
645 posts
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Scarborough
Tearing up of nafta is not a black swan event. Without nafta, our exports will face a duty of 3-4%. Not a deal breaker

And do not forget our corporate welfare system, it runs in billions every year. Liberals will find a way to provide welfare to corporates to cope up with new scenario of no nafta

Large Canadian companies I am sure have already thought of how to deal with no nafta situarion

Flowerp wrote:
Jan 11th, 2018 3:13 pm
I thought that the 6th round NAFTA negotiations are going to bring about a black swan event for the canadian equities .. not so much USA. No ?
Deal Addict
Mar 10, 2011
2095 posts
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Toronto
retireat50 wrote:
Jan 10th, 2018 10:46 pm
Not concerned adding utilities in rising interest rate environment?
Nope, we are still at near historic low interest rates and dont expect big increases. In any case I go long on utilities and they have a very long history of increasing dividends.
Member
Jun 28, 2016
267 posts
139 upvotes
Pursuit2013 wrote:
Jan 11th, 2018 3:41 pm
Do you really think CPG will hit $18? and how far ahead is this target for? I'm sitting at CPG cost of $21 and not sure when to write this off..it hurts. It was up at $11 few months ago and with oil hitting close to $64, shares are still not high enough.
$17-18 is book value, which I think is a realistic price for CPG if WTI trades averages $65-70 this year. So, if WTI averages $68 next year, I would expect to hit the target within 12 months. If WTI just trades around current levels, 2 years is more realistic. If the strip is a good predictor of prices, then $18 is too high. $12-14 would be more realistic in that case. I will note that CPG is very volatile, so I could easily see it diving back below $10 again (maybe even more than once) if oil corrects downwards this year before moving up again.

At $60 WTI, despite half their oil being hedged at lower prices, they expect their dividend+capex to be fully covered next year, while they grow production by 7%. The actual price they would need to cover their dividend is around $58 WTI, if they were unhedged. If the CAD falls, this will also help them. At current prices ($63.55 WTI at time of writing), they would generate 4.5-5% of their market cap in earnings, giving a realistic forward P/E 20-22.5. By contrast, analysts, using much lower average oil prices for 2018, predict negative earnings for 2018 right now. Unless WTI drops $10-15 and stays down there, that's not very realistic, so these estimates are likely to be revised up over the course of the year, increasing the price of CPG with each revision.

If CPG rises above $14 this quarter, I might consider it overbought enough to sell, in hopes of buying it back on a correction, but, otherwise, I think it's very good value. E&P prices tend to lag rises in oil prices historically, so oil prices just staying where they are would be bullish for most oil stocks, and certainly for CPG. Obviously, in the scenario where oil rises to $80 (I don't think that's realistic, but Citi and other analysts are starting to talk about the possibility) CPG could trade well into the $20s, or maybe even hit $30 again.

As it's not exposed to the pipeline problems crushing Albertan production and produces light/medium oil, CPG is probably one of the best Canadian options for playing a bull run in E&Ps, which seems very likely this year. This is why I am happy to keep holding half of my position and will be adding at a lower cost basis if it plunges sub-$9 again (my current average cost is about $9.50).
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Feb 11, 2013
481 posts
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BC
Wavelet wrote:
Jan 11th, 2018 7:56 pm
$17-18 is book value, which I think is a realistic price for CPG if WTI trades averages $65-70 this year. So, if WTI averages $68 next year, I would expect to hit the target within 12 months. If WTI just trades around current levels, 2 years is more realistic. If the strip is a good predictor of prices, then $18 is too high. $12-14 would be more realistic in that case. I will note that CPG is very volatile, so I could easily see it diving back below $10 again (maybe even more than once) if oil corrects downwards this year before moving up again.

At $60 WTI, despite half their oil being hedged at lower prices, they expect their dividend+capex to be fully covered next year, while they grow production by 7%. The actual price they would need to cover their dividend is around $58 WTI, if they were unhedged. If the CAD falls, this will also help them. At current prices ($63.55 WTI at time of writing), they would generate 4.5-5% of their market cap in earnings, giving a realistic forward P/E 20-22.5. By contrast, analysts, using much lower average oil prices for 2018, predict negative earnings for 2018 right now. Unless WTI drops $10-15 and stays down there, that's not very realistic, so these estimates are likely to be revised up over the course of the year, increasing the price of CPG with each revision.

If CPG rises above $14 this quarter, I might consider it overbought enough to sell, in hopes of buying it back on a correction, but, otherwise, I think it's very good value. E&P prices tend to lag rises in oil prices historically, so oil prices just staying where they are would be bullish for most oil stocks, and certainly for CPG. Obviously, in the scenario where oil rises to $80 (I don't think that's realistic, but Citi and other analysts are starting to talk about the possibility) CPG could trade well into the $20s, or maybe even hit $30 again.

As it's not exposed to the pipeline problems crushing Albertan production and produces light/medium oil, CPG is probably one of the best Canadian options for playing a bull run in E&Ps, which seems very likely this year. This is why I am happy to keep holding half of my position and will be adding at a lower cost basis if it plunges sub-$9 again (my current average cost is about $9.50).
Thank you for your analysis - very helpful. Also, your average cost of $9.50 is an amazing place to be! Hopefully they can increase the dividend once things pick up!

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