oil and gas
CANADIAN PACIFIC RAILWAY LTD., $200.48, Toronto symbol CP, and CANADIAN NATIONAL RAILWAY CO., $67.94, Toronto symbol CNR, both stand to gain as a lack of pipeline capacity in Western Canada forces oil producers to ship crude by rail. In 2013, oil shipments accounted for just 6% of CP’s revenue and 4% of CN’s revenue. However, an oil industry group now expects rail shipments to jump from 200,000 barrels a day in 2013 to 700,000 by 2016. Both companies are upgrading their networks to handle the rising demand. As well, Ottawa recently brought in new rules to phase out older tanker cars, like the ones that exploded in the July 2013 train crash in Lac-Mégantic, Quebec. Oil producers own most of these cars, so they would have to pay for their replacements, not the railways....
AMAZON.COM INC., $326.27, symbol AMZN on Nasdaq, has launched Prime Music, a music-streaming service that’s now bundled with a $99-a-year Amazon Prime subscription. This is the fourth part of the Amazon Prime service. The other three are unlimited shipping, a Kindle e-book library and Prime Instant Video (streaming movies and TV shows). Amazon’s music service will start off with just over a million songs, with no ads and no limit on how much users can listen. It will also offer playlists curated by music experts Amazon will hire....
ENCANA CORP. $26 (www.encana.com) has completed its plan to sell shares of subsidiary PrairieSky Royalty Ltd. (Toronto symbol PSK) to the public. PrairieSky owns the oil and natural gas rights to 5.2 million acres in Alberta....
Pennsylvania-based Vanguard Group is one of the world’s largest investment management companies. The group administers over $2 trillion U.S. in 170 mutual funds.
Vanguard, which went into business in 1975, offers low-fee index mutual funds. Generally speaking, Canadians can’t buy units of mutual funds that are registered in the U.S., because they aren’t registered with provincial securities commissions....
Vanguard, which went into business in 1975, offers low-fee index mutual funds. Generally speaking, Canadians can’t buy units of mutual funds that are registered in the U.S., because they aren’t registered with provincial securities commissions....
PENGROWTH ENERGY $7.12 (Toronto symbol PGF; Shares outstanding: 526.2 million; Market cap: $3.7 billion; TSINetwork Rating: Average; Dividend yield: 6.7%; www.pengrowth.com) produced 75,102 barrels a day (55% oil and natural gas liquids, 45% natural gas) in the first quarter of 2014, down 16.3% from 89,702 a year earlier.
The drop was mainly because Pengrowth sold several less important oil and gas properties in Western Canada....
The drop was mainly because Pengrowth sold several less important oil and gas properties in Western Canada....
CANADIAN PACIFIC RAILWAY $190.72 (Toronto symbol CP; Shares o/s: 175.1 million; Market cap: $32.7 billion; TSINetwork Rating: Average; Dividend yield: 0.7%; www.cpr.ca) expects to ship 140,000 to 210,000 carloads of crude oil a year by the end of 2015, up from 90,000 in 2013.
Higher crude shipments and improving efficiency should increase CP’s 2014 earnings by 30% over 2013, to $8.35 a share....
Higher crude shipments and improving efficiency should increase CP’s 2014 earnings by 30% over 2013, to $8.35 a share....
We still think investors will profit most—and with the least risk—by buying shares of well-established, dividend-paying stocks with strong business prospects. These are companies that have strong positions in healthy industries. They also have strong management that will make the right moves to remain competitive in a changing marketplace. Stocks like these give investors an additional measure of safety in today’s volatile markets. And the best ones offer an attractive combination of moderate p/e’s (the ratio of a stock’s price to its per-share earnings), steady or rising dividend yields (annual dividend divided by the share price) and promising growth prospects....
BIRCHCLIFF ENERGY $14.75 (Toronto symbol BIR; TSINetwork Rating:Speculative) (403-261-6401;www.birchcliffenergy.com; Units outstanding: 145.0million; Market cap: $2.2 billion; No dividends paid) reports that its daily production rose 21.6% in the three months ended March 31, 2014, to 31,749 barrels of oil equivalent from 26,108 a year earlier. Cash flow per share jumped 122.2%, to $0.60 from $0.27, on the increased production and higher oil and gas prices.
The company plans to spend $291 million on exploration and development this year, which should boost its 2014 output to a record 34,000 barrels a day. Birchcliff expects to generate full-year cash flow of $331 million, or $2.30 a share, so it can comfortably afford these outlays.
Birchcliff Energy is still a buy.
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The company plans to spend $291 million on exploration and development this year, which should boost its 2014 output to a record 34,000 barrels a day. Birchcliff expects to generate full-year cash flow of $331 million, or $2.30 a share, so it can comfortably afford these outlays.
Birchcliff Energy is still a buy.
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COMPUTER MODELLING GROUP $14.88 (Toronto symbol CMG; TSINetwork Rating: Speculative) (403-531-1300; www.cmgroup.com; Shares outstanding: 78.6 million; Market cap: $1.2 billion; Dividend yield: 2.7%) (all figures split 2-for-1) sells software and consulting services that help oil and gas producers use advanced recovery techniques to get more out of their wells. It has customers in over 50 countries and offices in Calgary, Houston, London, Caracas, Bogota, Kuala Lumpur and Dubai.
In the quarter ended March 31, 2014, Computer Modelling’s revenue rose 3.6%, to $20.0 million from $19.3 million a year earlier. Software licence sales (89% of total revenue) rose slightly, but consulting and professional services (11%) jumped 39.1%, thanks to new projects and a large consulting agreement.
Earnings gained 6.7%, to $7.7 million from $7.25 million. Per-share earnings jumped 18.8%, to $0.095 from $0.08, on fewer shares outstanding.
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In the quarter ended March 31, 2014, Computer Modelling’s revenue rose 3.6%, to $20.0 million from $19.3 million a year earlier. Software licence sales (89% of total revenue) rose slightly, but consulting and professional services (11%) jumped 39.1%, thanks to new projects and a large consulting agreement.
Earnings gained 6.7%, to $7.7 million from $7.25 million. Per-share earnings jumped 18.8%, to $0.095 from $0.08, on fewer shares outstanding.
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PRECISION DRILLING CORP. $14 (Toronto symbol PD; Aggressive Growth Portfolio, Resource sector; Shares outstanding: 292.1 million; Market cap: $4.1 billion; Price-to-sales ratio: 2.0; Dividend yield: 1.7%; TSINetwork Rating: Extra Risk; www.precisiondrilling.com) provides contract drilling services to land-based oil and gas producers, mainly in North America. The company operates 330 rigs.
Higher oil and gas prices have spurred demand for Precision’s drilling services. As a result, its revenue rose 12.8% in the first quarter of 2014, to $672.2 million from $595.7 million a year earlier. Earnings gained 8.8%, to $101.6 million from $93.3 million. Per-share earnings rose 6.1%, to $0.35 from $0.33, on more shares outstanding.
In response to stronger-than-expected drilling activity, Precision now plans to spend $833 million to build and upgrade rigs in 2014, up 31.4% from its earlier forecast of $634 million. Drillers have already signed contracts for these new rigs, which cuts the risk of this investment.
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Higher oil and gas prices have spurred demand for Precision’s drilling services. As a result, its revenue rose 12.8% in the first quarter of 2014, to $672.2 million from $595.7 million a year earlier. Earnings gained 8.8%, to $101.6 million from $93.3 million. Per-share earnings rose 6.1%, to $0.35 from $0.33, on more shares outstanding.
In response to stronger-than-expected drilling activity, Precision now plans to spend $833 million to build and upgrade rigs in 2014, up 31.4% from its earlier forecast of $634 million. Drillers have already signed contracts for these new rigs, which cuts the risk of this investment.
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