# CPG - buy to "average down"?



## jargey3000 (Jan 25, 2011)

Remember when this baby was one of the must-have darlings of the market?
I know "averaging-down" is more often than not a mug's game, but if you owned it, would you be buying it at current prices (sub-$14), to bring your ACB down while waiting for an (inevitable?) upswing?


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## Nerd Investor (Nov 3, 2015)

Tempting. I've bought and sold a couple of partial positions as this has swung around over the past couple of years and currently hold at an average cost of $15.40.
I think I'm comfortable with my oil exposure as it stands though, also have some Suncor still and own some oil indirectly through IEP (at least I think that's still the case lol).


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## doctrine (Sep 30, 2011)

You have to assess the company as it sits now. Last time I checked, they seemed pretty middle of the road. Some growth, but average or above average debt loads. Personally, if I was going in this space I would want the company with a lower level of debt. WCP>CPG for me. Or CJ. All oil stocks will do well if oil prices jump, but CPG may do worse than average if oil prices tank.


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## agent99 (Sep 11, 2013)

I find CPG's main use for us, is to sell to offset capital gains on other stocks. Plus, I can sell it on US side when we need US$.


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## humble_pie (Jun 7, 2009)

jargey3000 said:


> Remember when this baby was one of the must-have darlings of the market?
> I know "averaging-down" is more often than not a mug's game, but if you owned it, would you be buying it at current prices (sub-$14), to bring your ACB down while waiting for an (inevitable?) upswing?



no i wouldn't

don't do it jargey

try singing a little song every time you get one of these weird ideas, i bet it'll help


.


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## jargey3000 (Jan 25, 2011)

humble_pie said:


> no i wouldn't
> 
> don't do it jargey
> 
> ...


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## humble_pie (Jun 7, 2009)

what happened when he was shootin at the food .each:

back to crescent point, one could always sell some options in an effort to hitch up some money on this dog

the problem will likely be this classic trap: in order to fetch decent premium, the option writer will have to sell calls fairly close to the money. Like maybe a 16, something like that.

then one fine day suppose that all the oils including CPG do go into liftoff. Boom, the stock gets called away at a price which is pitifully below what investor paid for the stock originally. He loses his stock at 16 while everybody else is larking around in the low to mid 20s.

a classic trap


.


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## jargey3000 (Jan 25, 2011)

humble_pie said:


> what happened when he was shootin at the food .each:
> 
> back to crescent point, one could always sell some options in an effort to hitch up some money on this dog
> 
> ...


Thanks, Miss Hathaway.....


..


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## Nerd Investor (Nov 3, 2015)

humble_pie said:


> what happened when he was shootin at the food .each:
> 
> back to crescent point, one could always sell some options in an effort to hitch up some money on this dog
> 
> ...


Yes, I'd be weary of writing calls for this very reason. On the other hand, if you're considering averaging down at the current price anyway, and truly believe in the stock over the medium-long term, perhaps writing some puts slightly below the current price is a reasonable idea rather than outright purchasing more.


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## jargey3000 (Jan 25, 2011)

Nerd Investor said:


> Yes, I'd be weary of writing calls for this very reason. On the other hand, if you're considering averaging down at the current price anyway, and truly believe in the stock over the medium-long term, perhaps writing some puts slightly below the current price is a reasonable idea rather than outright purchasing more.


Thanks Milburn


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## Oldroe (Sep 18, 2009)

You need to but 300% in to get your avg. down near current price. It's a big commitment.


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## jargey3000 (Jan 25, 2011)

I've crossed it off my "to do" list.
I've got other trouble brewing over at HCG!


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## Nerd Investor (Nov 3, 2015)

Now at a 52 week low, which I have to admit gives me a bit of an itchy trigger finger LOL. 
But I'm still going to wait it out a bit longer I think.


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## My Own Advisor (Sep 24, 2012)

I don't own very many shares but some....and watching. Yield is low but given they've slashed the dividend so much, maybe a good thing if oil ever comes back.


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## Pluto (Sep 12, 2013)

https://ca.finance.yahoo.com/news/crescent-point-energy-corp-buy-152626054.html


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## Ponderling (Mar 1, 2013)

I once had about 22k in these guys - some bought at close to $38, and some about a year and a half ago on the last dip. 
Was down to about 6k, so I just took about $10K out of an annual bonus that comes most years with my job and dumped it into more CPG.

Time will tell if this was a good move or not.
I try to invest the bonus, so we don't get used to spending it and seeing lifestyle spending growth. That is hard to rein in on years the bonus might not come through.


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## CPA Candidate (Dec 15, 2013)

The valuation on this company is pretty ridiculous; about a 20% discount to book and I doubt they have any impairment at this WTI price and exchange rate. More than anything it seems just like hate for management.


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## Ponderling (Mar 1, 2013)

Well then let the knives come out, but so far , barring a massive interest rate run up that would put ceo scott in a bind they have strung out money to owners not too bad for a producer still paying any dividend at the current low world oil price.

most recent oil industry buy was psi to try and get in on the IT slant of oil, and with some reasonable income streams coming from beyond our borders


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## Nerd Investor (Nov 3, 2015)

Hovering right around $10 now. 
Basically a 10 year low and aside from being a pretty psychologically significant figure, $10 has acted as a strong support line in the recent past. I'm thinking of adding a second small position in my TFSA (my existing position is non-reg).


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## My Own Advisor (Sep 24, 2012)

Tempted to buy a few hundred shares as well. Will watch. Will be fine if oil ever comes back to $60 or $70 but you never know. Oil must rebound at some point??


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## OnlyMyOpinion (Sep 1, 2013)

Why must oil rebound? The fundamentals have changed - there is no global oil shortage and alternatives continue to make political hay (even if actual displacement is minor).
As we've seen, as soon as economics are reached, the USA can crank up domestic supply* and the middle east is still there as always.
(*I'd say the same about Canada as well but we seem to have this masochistic tendency to want to castrate our resource industries now. But hey, Dollarama is doing great!)
IMO other than riding the short term ups and downs, or a black (trump)eter swan, or perhaps clipping dividends from a Sunor or Imperial, oil stocks are not destined for much future growth.


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## jargey3000 (Jan 25, 2011)

I see it ended below $10 yesterday.
anybody actually buying at this level?
the way i figure it is: If i buy "x" no. of shares at "y"$, I can lower my avg. cost to "z"
then, when oil rebounds to "xx"$/barrel, CPG will go to "yy"$, and I'll sell for a nice profit! Simple!! :uncomfortableness:


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## dubmac (Jan 9, 2011)

IMO, and from what I've read, oil is range bound between $45-55. Not likely to change in the near future.
:ambivalence:


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## JordoR (Aug 20, 2013)

I've been thinking of averaging down my position as well.. but my TFSA is maxed and I only have a little bit of cash floating around. It's hard mentally to invest more even though it could bring my average down a fair bit.


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## Ponderling (Mar 1, 2013)

I 'averaged down' a year ago. It has only slightly dulled the ache that this thing flying below $10 has given to my heart. But at this price, the other thought is 'why sell in the short term'? I don't need that big a loss to offset anything else \i am selling at a gain this year. I actually have past years actualize losses ready and waiting to do offset duty already lined up.


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