oil prices
We think conservative investors could hold up to 10% of their portfolios in foreign stocks. One way to do that is to buy carefully chosen exchange traded funds (ETFs) that have an overseas focus. The best ETFs offer very low management fees and well-diversified, tax-efficient portfolios of high quality stocks. Here’s a look at six global ETFs:...
Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a beginning or experienced investor, these weekly updates are designed to give you specific investment tips and stock market advice. Each Investor Toolkit update gives you a fundamental piece of investment advice, and shows you how you can put it into practice right away.
Today’s tip: “Bottom-up investors have the great advantage of basing their decisions on what they know about stocks, rather than trying to guess how stocks might be affected by a random series of events.”
In the early chapters of any good book on fundamental stock market advice, you will come across the two basic ways to make investment decisions: bottom-up and top-down....
Today’s tip: “Bottom-up investors have the great advantage of basing their decisions on what they know about stocks, rather than trying to guess how stocks might be affected by a random series of events.”
In the early chapters of any good book on fundamental stock market advice, you will come across the two basic ways to make investment decisions: bottom-up and top-down....
Overall, the drop in oil prices is a favourable development for the universe of stocks we follow and recommend. It will cut into the earnings of our oil stock recommendations, of course. But for all other stocks we follow, and their customers, it will act like a major tax cut. Note, too, that lower oil prices will cut into the cash flow of the top international troublemakers—Russia, Iran, and Venezuela—in three key parts of the world. A steep plunge like this inevitably sparks predictions of an even bigger drop ahead. It pays to be skeptical of predictions like these, just as it pays to be skeptical of bullish predictions that follow a big rise in the price of a stock or a commodity. Most are extrapolations on the rise or fall that has already taken place....
DELPHI ENERGY $1.40 (Toronto symbol DEE; TSINetwork Rating: Speculative)(403-265-6171; www.delphienergy.ca; Shares outstanding: 155.4 million; Market cap: $217.6 million; No dividends paid) develops, produces and explores for oil and natural gas. About 67% of its output is gas. The remaining 33% is oil.
In the three months ended September 30, 2014, Delphi’s production rose 7.5%, to 9,461 barrels of oil equivalent a day from 8,797 a year earlier. Production was down 9.0% from 10,397 barrels a day in the quarter ended June 30, 2014, but that was due to processing delays caused by outside companies.
Those issues, which were resolved at the end of August, cut Delphi’s production by about 1,700 barrels a day in the latest quarter. Its output averaged 11,500 barrels a day in September and October.
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In the three months ended September 30, 2014, Delphi’s production rose 7.5%, to 9,461 barrels of oil equivalent a day from 8,797 a year earlier. Production was down 9.0% from 10,397 barrels a day in the quarter ended June 30, 2014, but that was due to processing delays caused by outside companies.
Those issues, which were resolved at the end of August, cut Delphi’s production by about 1,700 barrels a day in the latest quarter. Its output averaged 11,500 barrels a day in September and October.
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BIRCHCLIFF ENERGY $9.05 (Toronto symbol BIR; TSINetwork Rating: Speculative) (403-261-6401; www.birchcliffenergy.com; Shares outstanding: 152.2 million; Market cap: $1.4 billion; No dividends paid) develops, produces and explores for oil and gas, mainly in the Peace River Arch area near the Alberta/B.C. border. About 84% of its output is gas. The remaining 16% is oil.
In the three months ended September 30, 2014, Birchcliff’s production rose 38.8%, to 34,235 barrels of oil equivalent a day from 24,662 a year earlier. Cash flow per share jumped 66.7%, to $0.50 from $0.30, on the increased output and higher gas prices.
Birchcliff recently completed Phase 4 of its gasplant expansion in Pouce Coupe, Alberta. That raised the facility’s capacity by 20% and will let Birchcliff bring the additional gas it is now producing to market.
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In the three months ended September 30, 2014, Birchcliff’s production rose 38.8%, to 34,235 barrels of oil equivalent a day from 24,662 a year earlier. Cash flow per share jumped 66.7%, to $0.50 from $0.30, on the increased output and higher gas prices.
Birchcliff recently completed Phase 4 of its gasplant expansion in Pouce Coupe, Alberta. That raised the facility’s capacity by 20% and will let Birchcliff bring the additional gas it is now producing to market.
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WESTJET AIRLINES $32.32 (Toronto symbol WJA; TSINetwork Rating: Extra Risk)(1-877-493-7853; www.westjet.com; Shares outstanding: 127.8 million; Market cap: $4.2 billion; Div. yield: 1.5%) has jumped to new all-time highs over the past month as fuel prices continue to drop along with oil prices. Fuel makes up around a third of an airline’s operating costs.
Meanwhile, the company’s load factor rose to 80.5% from 79.7% in November 2013. Load factor is the percentage of available seats occupied by paying passengers.
The increase was even more positive considering that the company increased its capacity by 6.9% to meet higher demand. Demand for WestJet’s flights remains high, and the launch of its new Canadian regional airline, WestJet Encore, has also gone well.
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Meanwhile, the company’s load factor rose to 80.5% from 79.7% in November 2013. Load factor is the percentage of available seats occupied by paying passengers.
The increase was even more positive considering that the company increased its capacity by 6.9% to meet higher demand. Demand for WestJet’s flights remains high, and the launch of its new Canadian regional airline, WestJet Encore, has also gone well.
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RUSSEL METALS $27.18 (Toronto symbol RUS; TSINetwork Rating: Speculative)(905-819-7777; www.russelmetals.com; Shares outstanding: 61.6 million; Market cap: $1.7 billion; Dividend yield: 5.6%) is one of North America’s largest metal distributors. It serves 39,000 clients at 53 locations in Canada and 12 in the U.S.
In the quarter ended September 30, 2014, Russel’s revenue rose 30.4%, to $1.04 billion from $796.8 million a year earlier. The company’s metal-services business raised its prices in response to higher demand, increasing its revenue by 14%. The energy products division, which supplies pipes for oil and gas drillers, saw its revenue jump 41%.
Earnings gained 74.6%, to $33.0 million, or $0.54 a share. A year earlier, the company earned $18.9 million, or $0.31. Russel has invested in new plants and processing equipment in the past three years, which has cut its costs and improved its efficiency. That’s paying off with higher profit margins.
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In the quarter ended September 30, 2014, Russel’s revenue rose 30.4%, to $1.04 billion from $796.8 million a year earlier. The company’s metal-services business raised its prices in response to higher demand, increasing its revenue by 14%. The energy products division, which supplies pipes for oil and gas drillers, saw its revenue jump 41%.
Earnings gained 74.6%, to $33.0 million, or $0.54 a share. A year earlier, the company earned $18.9 million, or $0.31. Russel has invested in new plants and processing equipment in the past three years, which has cut its costs and improved its efficiency. That’s paying off with higher profit margins.
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ARC RESOURCES $26.76 (Toronto symbol ARX; Shares outstanding: 317.4 million; Market cap: $8.1 billion; TSINetwork Rating: Speculative; Dividend yield: 4.5%; www.arcresources.com) produces oil and natural gas in Western Canada. Its average daily output of 110,165 barrels of oil equivalent is 60% gas and 40% oil.
In the three months ended June 30, 2014, ARC’s cash flow per share jumped 43.1%, to $0.93 from $0.65 a year earlier.
Production gained 17.9%, even though maintenance on existing wells cost the company an estimated 2,400 barrels a day in the latest quarter. ARC’s realized gas price rose 28.3%. Oil prices increased 14.5%.
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In the three months ended June 30, 2014, ARC’s cash flow per share jumped 43.1%, to $0.93 from $0.65 a year earlier.
Production gained 17.9%, even though maintenance on existing wells cost the company an estimated 2,400 barrels a day in the latest quarter. ARC’s realized gas price rose 28.3%. Oil prices increased 14.5%.
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CAE INC. $15 (Toronto symbol CAE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 265.3 million; Market cap: $4.0 billion; Price-to-sales ratio: 1.8; Dividend yield: 1.9%; TSINetwork Rating: Average; www.cae.com) gets 55% of its revenue by selling flight simulators and pilot-training services to commercial airlines. Another 40% comes from simulators and training for military clients, mainly in the U.S.
CAE gets the remaining 5% of its sales by making medical-simulation products, such as mannequins, for training nurses and medical students.
Steady growth in revenue, earnings
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CAE gets the remaining 5% of its sales by making medical-simulation products, such as mannequins, for training nurses and medical students.
Steady growth in revenue, earnings
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CENOVUS ENERGY INC. $29 (Toronto symbol CVE; Conservative Growth Portfolio, Resources sector; Shares outstanding: 757.1 million; Market cap: $22.0 billion; Price-to-sales ratio: 1.0; Dividend yield: 3.7%; TSINetwork Rating: Average; www.cenovus.comtarget=”_blank”) gets 40% of its revenue from its oil sands projects and conventional oil and gas wells in western Canada. These properties’ reserves should last 24 years.
Refining supplies the remaining 60% of Cenovus’s revenue. The company ships its oil to its 50%-owned refineries in Illinois and Texas. Phillips 66 (New York symbol PSX) owns the other 50% of these operations.
Thanks to higher production and oil prices, Cenovus’s revenue increased 62.0%, from $11.5 billion in 2009 to $18.7 billion in 2013. Even with the recent oil price decline, its revenue should rise to around $20 billion in 2014.
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Refining supplies the remaining 60% of Cenovus’s revenue. The company ships its oil to its 50%-owned refineries in Illinois and Texas. Phillips 66 (New York symbol PSX) owns the other 50% of these operations.
Thanks to higher production and oil prices, Cenovus’s revenue increased 62.0%, from $11.5 billion in 2009 to $18.7 billion in 2013. Even with the recent oil price decline, its revenue should rise to around $20 billion in 2014.
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