is now the time to invest in oil stocks?

My view on investing in commodities is quite simple.

There are only 2 types of commodity related businesses that are investment grade. One is companies that MOVE commodities. This includes pipelines and to a certain extent rails (altho they are technically industrials) like Enbridge, Kinder Morgan, CN, etc. The other is companies that are super diversified, either via vertical integration like Exxon, Suncor, Chevron, or via product type, like BHP.

Everything else is highly speculative. Some people may have a spot in their portfolio for that, but expect to lose your shirt once in a while when the bust cycle inevitably comes around.

Cerenity wrote: ↑My view on investing in commodities is quite simple.

There are only 2 types of commodity related businesses that are investment grade. One is companies that MOVE commodities. This includes pipelines and to a certain extent rails (altho they are technically industrials) like Enbridge, Kinder Morgan, CN, etc. The other is companies that are super diversified, either via vertical integration like Exxon, Suncor, Chevron, or via product type, like BHP.

Everything else is highly speculative. Some people may have a spot in their portfolio for that, but expect to lose your shirt once in a while when the bust cycle inevitably comes around.

I believe that if one is in the early investing accumulation stage, you should limit the number of upstream O&G companies in your portfolio. Even the integrateds (upstream + downstream) are not immune to commodity price fluctuations (HSE, SU, etc.). In my personal experience, I've had the most success, by far, with midstreams such as IPL, KEY, ALA, VSN etc. purchased at reasonable valuations and modest/high initial dividend yields.

I recommend everyone sell your oil stocks. with oil prices this low, companies like COS, canadian natural resources, suncor, etc... can't make a profit and will soon go bankrupt.

Suncor? Bankrupt? Give me your stuff man I need some.

theredstar wrote: ↑I recommend everyone sell your oil stocks. with oil prices this low, companies like COS, canadian natural resources, suncor, etc... can't make a profit and will soon go bankrupt.

LOLLL im a newbie at investing but even I know these companies are straight beasts....

so im looking to invest like 5k 10k in oil stocks or should I do it in like a oil mutual fund... what should i invest in? thx

flyeaglesfly wrote: ↑LOLLL im a newbie at investing but even I know these companies are straight beasts....

so im looking to invest like 5k 10k in oil stocks or should I do it in like a oil mutual fund... what should i invest in? thx

Same here I am watching a few energy funds to buy when they go lower. Not trading stocks. Only funds.

wait 2 more weeks for tax season to be over

COS is not profitable under $65 oil

SU will still make money! Will never go backrupt....

likes goes for HSE and CNQ . . . WCP is the only mid name i'd think of right now

BTE in another 6 months could have a dividend cut...
LRE should be cutting soon, be under a dollar i'd bet! surge will be the next to cut!!

SheaButters wrote: ↑wait 2 more weeks for tax season to be over

COS is not profitable under $65 oil

SU will still make money! Will never go backrupt....

likes goes for HSE and CNQ . . . WCP is the only mid name i'd think of right now

BTE in another 6 months could have a dividend cut...
LRE should be cutting soon, be under a dollar i'd bet! surge will be the next to cut!!

Spoke too soon. BTE just cut their dividend from .24 a month to .10
So glad I got out at a higher price but still a huge loss. From here Baytex will likely hit $10 in the short term and possibly $4-5 at it's lowest. They have 3x debt to cash flow which is extremely high even though their debt is not due for a couple years. However if low oil stays around for a year or more look out...just a warning for those who plan on buying BTE.

flyeaglesfly wrote: ↑LOLLL im a newbie at investing but even I know these companies are straight beasts....

so im looking to invest like 5k 10k in oil stocks or should I do it in like a oil mutual fund... what should i invest in? thx

right now is not the time to invest in individual stocks. go for etfs or mutual funds (unless you can live with the extreme swings. the etfs will weather the storm a bit better.)

CLO
XEG
XMA

Depends on what you think the future of oil is. IMO it ain't so rosy. Prices are not going up any time soon, and when they do go back up they will never reach previous highs.

Now is not the time to invest in etfs or mutual funds in taxable accounts. Reason being the taxable distributions for year-end, for example XEG has a 7% capital gains distribution due towards the end of December

Isn't it ironic that just 3 months ago, no way people thought oil would reach this low....now people think no way oil would reach back at previous high levels.

techcrium wrote: ↑Isn't it ironic that just 3 months ago, no way people thought oil would reach this low....now people think no way oil would reach back at previous high levels.

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brunes wrote: ↑Depends on what you think the future of oil is. IMO it ain't so rosy. Prices are not going up any time soon, and when they do go back up they will never reach previous highs.

Never? That's quite a bold statement.