# Husky HSE.TO



## gibor365

Today I was surprised to see Goldman's downgrade HSE to 'Sell'. 
From my research HSE has a big insider buying and no selling. Fundamentals looks good. 
Thompson Reuters gives HSE the highest ranking: "HSE is currently among an exclusive group of 75 stocks awarded our highest average score of 10."
What is your opinion on this downgrade?


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## thenegotiator

would i buy at this level?
no.
but i am not Goldmann Sachs.
would u add at these levels?


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## blin10

i got in around 23 and unloaded all shares recently.... i believe its over bought right now


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## gibor365

thenegotiator said:


> would u add at these levels?


probably I'd add around $25 ...but I hate those downgrades 

my opinion that HSE is a solid stock with good future and solid dividends....just wanted to hear other opinions


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## Northern Engineer

I don't think I'd buy above the low 20's, but I'm not sure it's so over-valued as to be a 'Sell'. There's no link, did GS give a reason for the downgrade?


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## thenegotiator

gibor said:


> probably I'd add around $25 ...but I hate those downgrades
> 
> my opinion that HSE is a solid stock with good future and solid dividends....just wanted to hear other opinions


let me know when u bought at 25 bux.
u are going to get ur 25 bux level.
place an order and just leave it there


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## gibor365

Northern Engineer said:


> I don't think I'd buy above the low 20's, but I'm not sure it's so over-valued as to be a 'Sell'. There's no link, did GS give a reason for the downgrade?


http://www.theglobeandmail.com/glob...s-sell-rating-on-husky-energy/article4621188/


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## gibor365

thenegotiator said:


> let me know when u bought at 25 bux.
> u are going to get ur 25 bux level.
> place an order and just leave it there


sorry haver, i don't understnad your anglit... speak slower


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## avrex

This is the longest held stock in my portfolio (In Jan 2013, I will have held this stock for 10 years.)

During this time, it's annualized rate of return for me was 5%.
And that doesn't include some nice dividends over the last 5 years.
Not bad for the 'lost decade'. 

I will ignore Goldman and continue to hold.


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## HaroldCrump

If Goldman Sacs is downgrading it, it's almost a certainty that they are also buying simultaneously.
This is classic GS.


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## Cal

^Agreed.

If they announced the downgrade, GS has already sold. I would not have doubts that they would add again at a lower price point. 

As avrex mentioned it is best to avoid the media and make your own decisions.


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## doctrine

I also own HSE and tend to add to shares when it dips below $25, which is fairly common. It might be temporarily overbought on a chart basis, but is certainly not overvalued. They pay their dividend out of net earnings at about a 50% payout, which is far better than 90% of the oil companies out there with good dividends. Very secure, and a great insurance against high oil or gasoline prices. They refine as much as they produce, so their earnings are not as volatile as the oil price.


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## Spidey

This has been quite a long term hold for me. I'm still a little underwater on the price but am quite happy with the reliable, steady dividends. I've been patient with this one and see no reason to change now. I might sell off a little if the price goes above $30.


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## Addy

Spidey said:


> This has been quite a long term hold for me. I'm still a little underwater on the price but am quite happy with the reliable, steady dividends. I've been patient with this one and see no reason to change now. I might sell off a little if the price goes above $30.


Spidey I'm curious if you're hovering over the sell button with the price where it's at. I thought the price was going up because of the dividend but that's days past now and it's still climbing.


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## Jungle

This is one of our oldest stock holdings too..but not that old. Bought in 2010 and doubled up when it dipped to $21-22 whatever that was. Total return around 40% now.


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## doctrine

HSE is trading at about a P/E of 12 right now. Their profits are up because the refining margins are so high right now, they refine as much crude as they produce. It's primarily been multiple expansion for the more reliable profits than a company such as CNQ which has no refining capacity.


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## My Own Advisor

They say sell, I say buy. Wait, I did, but much cheaper than $29+. Anything those big firms say to sell, I do the opposite. I'm with avrex.


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## Spidey

Addy said:


> Spidey I'm curious if you're hovering over the sell button with the price where it's at. I thought the price was going up because of the dividend but that's days past now and it's still climbing.


No - partly because I don't see too many better places to put my money. I'm going to keep holding as this season tends to be good for energy stocks. If it keeps rising I may consider placing a trailing stop on some of my shares around April or so. Otherwise I'll just be patient and collect the dividends, even if it goes lower.


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## Lephturn

I've held this one since late 2011. With a 4% dividend plus some nice capital appreciation from where I bought it (mid 20's) unless the dividend is at risk or cut I'll stick with it.


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## doctrine

Husky has been hitting more 52 week highs. 1 year return with dividends: 34%. My last buy was last April when I picked up 100 shares for $24.54. Enjoying the dividends!


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## gibor365

doctrine said:


> Husky has been hitting more 52 week highs. 1 year return with dividends: 34%. My last buy was last April when I picked up 100 shares for $24.54. Enjoying the dividends!


I bought it at $25.25 about 1 year ago and happy with it


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## Jungle

Question is, why is it going up? Other energy stocks don't seem to be following (cos, su, etc)


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## My Own Advisor

I bought when everyone else was selling in the summer of 2011. I got lucky.


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## doctrine

Perhaps investors like their slow growing profile (5%/yr instead of trying to hit 20%), exposure to Brent crude for their Asian and Atlantic properties, and refining capacity in Alberta which lets them make huge profit margins. And a 50% dividend payout ratio. That's why I like them.


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## HaroldCrump

Jungle said:


> Question is, why is it going up? Other energy stocks don't seem to be following (cos, su, etc)


Many reasons - better refining margins due to increasing crack spreads, falling WTI to Brent spreads, acquisitions of new oil and NG properties in northern Canada and the South China seas, improving efficiencies, falling payout ratio %, etc.
All of this has led to analyst upgrades and renewed institutional interest.


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## Spidey

Sold off a little bit today at $31.60. Basically a rebalancing move as I may be a little over-weighted in this one. Nice to see the Rodney Dangerfield of stocks finally getting some of the respect it deserves.


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## Addy

CALGARY, ALBERTA, Jan 23, 2013 (MARKETWIRE via COMTEX) -- Husky Energy Inc. CA:HSE +0.69% will release its fourth quarter 2012 and year-end financial results before markets open on Wednesday, February 6, 2013.


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## Addy

3.98 Yield, up nearly 14%. Sustainable?


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## HaroldCrump

Addy, Husky has not increased their dividend - this is simply a factor of price fluctuations.
In fact, the yield is _down_ significantly in the last 2 years because of healthy price appreciation.
Payout ratio is 45% - very healthy, IMO.

HSE is yielding far less than many other Canadian oil sands producers such as COS.


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## doctrine

And has a far more sustainable dividend. Not many large energy companies with a dividend yield over 3% that isn't paying 100% or more of net earnings.


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## phrenk

Payout ratios based on earnings mean nothing when the company has a capex program in excess of $4B that doesn't flow through the income statement. It skews the payout ratio downward and makes it looks 'sustainable'. Be careful with capex intensive companies.

When i look at their LTM cash flow statement as of March 2013, they had a net change of cash of -776M. Reason they are yielding less than other producers is because they are spending more on capex.


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## HaroldCrump

phrenk said:


> Reason they are yielding less than other producers is because they are spending more on capex.


Yes, they have a very aggressive capex program in place, at a time when many other Canadian producers are cutting back.
Part of the reason is that they are quite diversified outside Canada.
They also have ambitions to develop uncharted northern territories.
Between 2010 and 2012 they have acquired a lot of auctioned land from the Canadian govt. in the north.

The way to play Husky is to keep a core # of shares, and buy more if/when it dips into the low $20 range, then sell some when it rises up to $30 or above.
In the last 3 years, there have been at least 3 such opportunities.

Of course, anything can happen, they can cut their dividend if really bad things happen.
But IMO, you could do worse.


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## avrex

Husky Energy profit jumps, tops estimates

Let's see what the stock price does today.


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## Jungle

Good to see this old dog doing well, but I'm thinking of selling for something that increases dividends. But yea, dividend is safe especially since the whole oil pricing is volitile, unlike COS if they have a few bad quarters, things could get tight. 

In other news, Cenovus didn't do so well, but not sure if they are integrated like HSE is.


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## gibor365

Jungle said:


> Good to see this old dog doing well, but I'm thinking of selling for something that increases dividends. But yea, dividend is safe especially since the whole oil pricing is volitile, unlike COS if they have a few bad quarters, things could get tight.


I'm not selling  yield is still 4% and P/E is reasonable at 15


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## HaroldCrump

Husky often announces their results on bad market days.
Not their fault, of course, just bad luck.
Stock is up slightly, but would have been better if overall market were up as well.


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## My Own Advisor

Happy to have bought this in mid-20s, enough to DRIP then and going-forward now.

Time will tell if it continues to tick along...


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## HaroldCrump

Darn it, I voted against the DRIP discount program back in 2010.
So much for my shareholder activism


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## doctrine

I was reviewing their financials the other day and everything seemed okay. Refining margins will be coming down but they have a lot of production coming online in the next couple of years. Still holding..


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## warp

I have owned Husky for a little over a year..bought at a good price as stock was dropping, so I am happy with the results.

However, one thing that concerned me and still does, as has been mentioned on this board by others, is that Husky has not raised their dividend in quite a while.
I was hoping that with the recent good results, the company might give a div increase. The yield is indeed dropping because the stock price is up, while the dividend amount stays the same. I think starting a policy of giving shareholders a small increase every year would help bouy the stock into the future.


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## HaroldCrump

warp said:


> However, one thing that concerned me and still does, as has been mentioned on this board by others, is that Husky has not raised their dividend in quite a while.
> I was hoping that with the recent good results, the company might give a div increase. The yield is indeed dropping because the stock price is up, while the dividend amount stays the same. I think starting a policy of giving shareholders a small increase every year would help bouy the stock into the future.


You are right that there is a steady and healthy EPS growth YoY (although 2012 EPS came in lower than 2011).
However, EPS is still well below 2006 - 2008 levels.
They had to cut their dividend in Q2 2009.
Therefore, I think they will be cautious in raising dividends again, at least until there is more certainty around the global energy direction, Chinese growth, and Fed easing policy.

There may also be a political reason - Li owns the majority of the company.
He DRIPs and gets a discount.
Raising the dividend buys him nothing.
He's already getting a 4.5% yield, incl. the DRIP.
The retained earnings also belong to the corporation, of which he owns a majority stake.

I think we won't see a dividend increase until annual EPS goes back closer to $3.


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## My Own Advisor

I like your thinking warp. Show me/us the money


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## doctrine

I don't think dividends will increase either anytime soon, not until their new production is online. Meanwhile you'll either have to be happy with their fairly conservative use of capital or go somewhere else. I really see them as a hedge against $150+/barrel oil because I think they would raise their dividend at that point like they did in '07 and '08.


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## My Own Advisor

Agreed, doctrine, might be a few more years for a dividend bump once they have more production online.


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## warp

Personally, I think there is room right now for a small bump in the dividend.
Husky can certainly raise the dividend by 4-6 %, let's say, just to give shareholders and the market a sign that they intend to return an increasing part of profits to the owners of the company, as these profits rise.

This will not result in any problem with the payout ratio......but if the dividend stays the same, as the stock price rises, many potential buyers may see Husky as a low div stock, with a management that intends to hoard profits, ( which may be wasted on dubious plans, etc, which happens all the time)


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## HaroldCrump

Not that I won't appreciate a dividend bump, but I would be surprised if they did - for the reasons I mentioned above.
Also, relative to other large integrated energy companies, Husky has a high capex program.
Not sure if it's the highest of the lot, but it is right up there.


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## HaroldCrump

_*Husky predicts "Great Wall of cash" from South China Sea*_

_The nine deepwater wells at Liwan 3-1 are in 1,200 to 1,500 metres of water approximately 75 kilometres from the shallow water platform, the largest ever built and installed in Asia._


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## Addy

This holding is bumping up the portfolio very nicely. Trying to figure out when to pull the trigger and sell.


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## cdnceo

HSE broke thru 52-week low today

div is now 4.24%


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## My Own Advisor

Time to buy more or DRIP more? No?


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## gibor365

My Own Advisor said:


> Time to buy more or DRIP more? No?


imho it's time to buy... P/E is 10.5 at the low 5 year range 10 - 17.7 and payout at 60%


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## cdnceo

Still getting crushed, no bottom in sight.

Li must be Ka-shing out.


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## Doryman

What are people's thoughts on Husky lately? It's at a 52 week low, P/E of 13. Looks like a good buying opportunity for a solid stock. However, these oil machinations have me a bit worried. I assume if I buy in too soon, it'll just dip lower to spite me (hello, COS...) 

Anyone buying more HSE? Selling?


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## Pluto

I'm not buying, but that's just because oil is not my cup of tea. This is a good company and you will eventually make money, and you will be paid a dividend while you wait. Pessimism is high, so it seems a good time to buy quality oil. Do you look at charts? if you draw a trend line from the June top, to the Sept top, then wait until the price hits the trend line, it would be safer, but not necessarily lower. Even though pessimistic times are good times to buy quality, there is no rush.


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## gladaki

Pluto said:


> I'm not buying, but that's just because oil is not my cup of tea. This is a good company and you will eventually make money, and you will be paid a dividend while you wait. Pessimism is high, so it seems a good time to buy quality oil. Do you look at charts? if you draw a trend line from the June top, to the Sept top, then wait until the price hits the trend line, it would be safer, but not necessarily lower. Even though pessimistic times are good times to buy quality, there is no rush.


what ur buying ?


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## Fraser19

I have to say, until recently HSE was not a stock I was considering, but it is one I am giving a lot of attention too. Would love to see it in the 18.00 area before I go in.


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## Pluto

gladaki said:


> what ur buying ?


Nothing. I'm mostly in cash/short term bonds. less than 25% in stocks. Sold all my bank stock 2-3 weeks ago when they didn't get to previous highs but S&P did - seemed pretty toppy to me. Still have some aapl, and AA. 

I'm considering puts on a S&P etf. Not considering any more long positions right now, but if I was, I'd be looking in the blue chip oil stocks.


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## HaroldCrump

Pluto said:


> I'd be looking in the *blue chip *oil stocks.


At this rate, there won't be any :biggrin:


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## supperfly17

How does HSE compare with SU? Would most consider SU a much better company?


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## AltaRed

supperfly17 said:


> How does HSE compare with SU? Would most consider SU a much better company?


Depends on what you believe HSE's exposure in China means to the company. I personally do not like the political risk with China so HSE will never be on my radar screen. Can you imagine having bought shares in some Russian companies about a year ago?


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## none

gibor said:


> imho it's time to buy... P/E is 10.5 at the low 5 year range 10 - 17.7 and payout at 60%


Oct 8: $28.27
Today: $22.55

Oct 8th was definitely not the time to buy. Where did gibor go wrong?


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## GOB

I don't think that's fair. HSE did look attractive on Oct. 8, just not in hindisght.

I think we all know what went wrong, and it's nothing to do with HSE.


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## none

I didn't mean to pick on Gibor specifically - I just find it interesting that when people make predictions that turn out to be wrong - there's an excuse (although not provided by gibor here) but when predictions turn out to be correct it's a big back patting event that they did a shrewed insightful trade.

Maybe it's just luck? (or bad luck). Anyway, i find it interesting as a potato.


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## GOB

That's human nature, I guess. Not limited to this forum or investing. 

I have admitted in the AAPL thread that I didn't foresee AAPL's shaky 2012/2013 year and underestimated how far the stock could drop despite the company still making absurd amounts of cash. I try to be fairly accountable, but we all see what we want to see.


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## OurBigFatWallet

For what it's worth I can't recall any 'expert' analyst predicting the share decline in oil prices


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## HaroldCrump

none said:


> I didn't mean to pick on Gibor specifically - I just find it interesting that when people make predictions that turn out to be wrong


We all make predictions - implicit or explicit - in our day to day lives, consciously or subconsciously.
The whole system is based on future expectations and predictions - going to school is a prediction you can get a good job, buying a house, getting married, taking a trip, etc. are all based on probabilities and prediction.



> Maybe it's just luck? (or bad luck). Anyway, i find it interesting as a potato.


Even as a couch potato investor, you are making predictions.
You are either long or short...that's a prediction.


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## hboy43

none said:


> I didn't mean to pick on Gibor specifically - I just find it interesting that when people make predictions that turn out to be wrong - there's an excuse (although not provided by gibor here) but when predictions turn out to be correct it's a big back patting event that they did a shrewed insightful trade.


I didn't see a prediction anywhere (posting October 8 was it), all I saw was Gibor thinking it was a good time to buy. I don't know if Gibor in general does make predictions and thus his posting could be considered an implied prediction.

hboy43


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## Pluto

none said:


> Oct 8: $28.27
> Today: $22.55
> 
> Oct 8th was definitely not the time to buy. Where did gibor go wrong?


gibor didn't go wrong. Its a good company and was decent at 28, and even a better deal at 22. 

I wasn't really going to buy any oil companies - capital intensive, slow growers, volatile oil prices etc etc etc. Not really my type of industry. But I'm starting to back slide now that I consider the dividend 5%, and this one will survive and recover. After tax dividend should more than cover inflation, and so any capital appreciation over the next 3-5 years should be all gravy. Then there is SU, a dividend paying survivor. Hmmmm. What to do?


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## Pluto

Bought some HSE this am. 5% yield and well managed company. Why would I pass up the opportunity?


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## gladaki

Pluto said:


> Bought some HSE this am. 5% yield and well managed company. Why would I pass up the opportunity?


I dont think some one can really time the market. But, price will bottom more. 20$ is not very far


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## My Own Advisor

I feel this is another good reason to DRIP, takes the emotion out of investing and you get the reinvest dividends paid (right now for O&G stocks) at good prices.


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## gladaki

My Own Advisor said:


> I feel this is another good reason to DRIP, takes the emotion out of investing and you get the reinvest dividends paid (right now for O&G stocks) at good prices.


True


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## Fraser19

My Own Advisor said:


> I feel this is another good reason to DRIP, takes the emotion out of investing and you get the reinvest dividends paid (right now for O&G stocks) at good prices.


I was reading I think on the dividend ninja page that HSE cannot be synthetically dripped. The article was from 2012, is this still the case?
I see you responded to it in 2012.


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## gibor365

hboy43 said:


> I didn't see a prediction anywhere (posting October 8 was it), all I saw was Gibor thinking it was a good time to buy. I don't know if Gibor in general does make predictions and thus his posting could be considered an implied prediction.
> 
> hboy43


I just said it based on fundamentals..... I couldn't predict that Saudis with thei "big friend" will dump oil prices so hard 
I actually bought small position at end of October at $27.84, yes it was very down since and i got only 1 dividend from this date , but i believe that it will rebound sooner or later.... no intention to sell....


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## gibor365

Fraser19 said:


> I was reading I think on the dividend ninja page that HSE cannot be synthetically dripped. The article was from 2012, is this still the case?
> I see you responded to it in 2012.


No, it was cancelled about year ago.... before in order to DRIP you should've call before every ex-div to you brokerage and ask to DRIP.... now it's DRIPing automatically


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## leeder

It's a good buy at $27.84. And like Pluto says, it's a better buy now. If oil bounces back up to "normal" range, I see this going to up to the low $30 range. The questions become, "when will the bounce occur?" and "what will the new norm be?"


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## Fraser19

gibor said:


> No, it was cancelled about year ago.... before in order to DRIP you should've call before every ex-div to you brokerage and ask to DRIP.... now it's DRIPing automatically


Do you know what the perceived benefit of having it set up the way it used to be?
I am having a hard time wrapping my mind around it.


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## DividendLuvr

This is a great entry point and I am happy to own at this price. Getting in.


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## My Own Advisor

Fraser19 said:


> Do you know what the perceived benefit of having it set up the way it used to be?
> I am having a hard time wrapping my mind around it.


I don't recall why they did it, maybe because they were issuing the shares from treasury and it was a cost for them to do so.

Treasury is one type of DRIP. There is also a market DRIP.


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## Ag Driver

I'm heavy in resources, but I couldn't resist. I took a very small position averaging 21.98 for 50 shares. I'll let that sit.


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## blin10

I'm slowly going into this one as well... same story in 09, load up on many nice oil plays, waited 3-4 years and made a killing, now it's that time again to repeat this :> ...


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## My Own Advisor

Do share your examples blin10...

I guess you see history repeating?


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## Valueinvestor

This one is a solid buy in my books. I can see it hitting 30-35 in the next couple years


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## gibor365

Valueinvestor said:


> This one is a solid buy in my books. I can see it hitting 30-35 in the next couple years


I'm ready for 1 more tranche  imho the best bet in large cap oil space .... it dropped today much less than 2 heavyweights SU and CNQ and price almost equal BV ... Maybe I'm wrong , but this is just illogical that HSE going too much down..

P.S. Everyone is buying at those prices on CMF, who is selling?!


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## OurBigFatWallet

gibor said:


> I'm ready for 1 more tranche  imho the best bet in large cap oil space .... it dropped today much less than 2 heavyweights SU and CNQ and price almost equal BV ... Maybe I'm wrong , but this is just illogical that HSE going too much down..
> 
> P.S. *Everyone is buying at those prices on CMF, who is selling*?!


I've always wondered who would sell under these conditions (and prices). Most would be faced with a loss, so it would be unfortunate if anyone was forced to sell. A bit of tax loss selling going on but I think that is only part of the story


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## gibor365

OurBigFatWallet said:


> I've always wondered who would sell under these conditions (and prices). Most would be faced with a loss, so it would be unfortunate if anyone was forced to sell. A bit of tax loss selling going on but I think that is only part of the story


I'd understand to sell COS, BTE or LRE for "tax loss selling"...even if there are still 2 weeks time to do it.... but HSE, SU, CNQ ?! It's just nuts!


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## My Own Advisor

I think some tax loss selling makes sense right now but like gibor, I hope I can just save enough in the coming weeks and months to buy more. I don't have lots of money to throw at the market and I will not get into leveraged investing when I still have a fat mortgage.

I do think SU, CNQ, HSE will come roaring back at some point. For now, there is blood in the streets thanks to the OPEC cartel.


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## leeder

OurBigFatWallet said:


> I've always wondered who would sell under these conditions (and prices). Most would be faced with a loss, so it would be unfortunate if anyone was forced to sell. A bit of tax loss selling going on but I think that is only part of the story


This sell-off isn't any different than the financial crisis sell off. After all, investors are humans and are emotional creatures. People get fearful and join in on the selling, whether or not it is tax loss selling. It's only natural.


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## gibor365

> thanks to the OPEC cartel.


 Not really... half OPEC members , esp. Venezuela, Iran, Nigeria ... don't want low prices...



> People get fearful and join in on the selling, whether or not it is tax loss selling. It's only natural.


 this is why I asked, who is selling.... because looks like on CMF everyone is buying


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## leeder

gibor said:


> this is why I asked, who is selling.... because looks like on CMF everyone is buying


Ahh... understood. Obviously it's the folks over at Financial Wisdom forum or Stockhouse.


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## PuckiTwo

OurBigFatWallet said:


> I've always wondered who would sell under these conditions (and prices). Most would be faced with a loss, so it would be unfortunate if anyone was forced to sell. A bit of tax loss selling going on but I think that is only part of the story


Well... I have been selling O&G and pipelines in last few weeks in order to protect profits from 2008/2009, and actually have sold more during the last week to claim more gains. If it drops further - I can buy it back and raise the ACBs or distribute the cash somewhere else. As somebody else, I think it was Pluto, said in another thread:


> "a lot of money can be made by not losing gains"


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## HaroldCrump

Retail investors like us buying or selling are not even a blip on the screens, let along move the market.

Most of the buying & selling is being done by funds, ETFs, institutions, and hedge funds, mostly via automatic, computer algorithm based trading.
A lot of this selling is a constant cycle of stops getting triggered.

Many of these funds & institutions play on a leveraged basis.
There days it is not unusual to have 50:1 leverage or even up to 70:1.

We have all seen the data that margin debt is now at all time highs, even higher than pre 2007.
Leverage and margin reduce risk tolerance, therefore, as soon as any market/sector starts moving up/down this fast, the leveraged investors have to quickly unwind their positions.
Which in turn triggers more stops, and so on.


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## My Own Advisor

http://www.theglobeandmail.com/repo...capital-budget-to-34-billion/article22114012/

HSE news:

Husky, meanwhile, said it will cut capital spending next year to $3.4-billion from the $5.1-billion forecast this year amid the plunge in oil prices and the near competition of two big projects.

“We continue to steer a steady ship through stormy waters,” chief executive officer Asim Ghosh said in a statement.

“Our strong financial position and resilient portfolio are helping weatherproof our business against current market conditions.”


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## blin10

picked this bad boy almost right at the bottom, long term hold for me... hopefully there won't be another bottom :>


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## gibor365

blin10 said:


> picked this bad boy almost right at the bottom, long term hold for me... hopefully there won't be another bottom :>


yeap...I remember your emails .... nicely done....you called the bottom  I missed it by 1 day....was planning to buy yesterday morning....but when saw 10% jump , was almost sure today will be profit taking...was wrong again...


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## bflannel

Do you plan on waiting it out for a little while gibor? Or perhaps do you not see any benefit in that now. I am asking because I am looking at buying at any of these levels but have been wishy washy in choosing to wait until the new year or just pull the trigger now and call it good and done.


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## OurBigFatWallet

One thing is almost certain - the dividend is safe


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## Chris L

Does this have better current value when compared to SU? I'm trying to make up my mind between the two. I have a couple mid-range, and would like to get something a little safer.


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## Chris L

Explosion at Ohio: https://ca.finance.yahoo.com/news/e...-output-cuts-expected-005823906--finance.html


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## My Own Advisor

Yikes Chris!


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## gardner

Maybe oil prices will move up a bit on the news.


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## Chris L

Doesn't look like it.


----------



## Getafix

Anyone still buying HSE? Almost got in today, missed the bid by a fraction. Hard to decide between CNQ & SU but the yield seems too good to pass up.


----------



## Chris L

Getafix said:


> Anyone still buying HSE? Almost got in today, missed the bid by a fraction. Hard to decide between CNQ & SU but the yield seems too good to pass up.


HSE seems to have the best value right now IMO vs. SU and CNQ. You can get in for what I paid a while back.


----------



## gibor365

none


> Oct 8: $28.27
> Today: $22.55
> 
> Oct 8th was definitely not the time to buy. Where did gibor go wrong?





gibor said:


> I just said it based on fundamentals..... I couldn't predict that Saudis with thei "big friend" will dump oil prices so hard
> I actually bought small position at end of October at $27.84, yes it was very down since and i got only 1 dividend from this date , but i believe that it will rebound sooner or later.... no intention to sell....


and Today: $28.57 ... so it at $27.84 it wasn't the best time , but also wasn't the worst one


----------



## 0xCC

Giving this thread a little bump. It is hovering around the $21.00 mark today I think based on slightly weaker oil prices (around $43.85 or so for WTI).

I'm looking for an entry point on this as I want to diversify my energy holdings outside of the 3 I have (BNP, CPG and COS, so it should be obvious why I am interested in a senior/integrated play). I got into SU in the $32-$34 range and now HSE is looking very tempting here. TDDI has it as an Action List Buy with something a $31.00 12-month target. Obviously that target price is totally dependent on oil price.

Anyone have any comments on Husky at these levels (and current oil prices)?


----------



## HaroldCrump

Your other 3 holdings are all pure Canadian oilsands & Bakken oil plays.
HSE is more diversified since it is an integrated company with downstream, refineries, and retail exposure.
Also, it has integrated play in South East Asia in natural gas (Liwan, etc).
So from that perspective, it appears to be a good bet.

However, I don't know how exposed that makes you to Canadian energy sector, and to oil in general.
It could make you over-exposed to Canadian energy (depending on what else you have going on, and how big your BNP, CPG and COS positions are).

If you want a different type of energy exposure, you can consider non Canadian integrated energy companies like Chevron, Royal Dutch Shell or BP.
It seems these three are also the first in line to get into Iran once the treaty formalities are done and the govt. is ready to open up the energy sector to foreign oil.

BTW, ignore that $31 price target - it is vaporware.
WTI oil will need to go to $100 or more for HSE to trade at $31.


----------



## 0xCC

Yeah, I don't place much trust in those target prices. They are more useful as a relative sort of gauge rather than an actual target.

Currently BNP, COS and CPG account for about 1.6% of my total portfolio value and a little under 3% of my portfolio income. Adding in my SU holding brings me to just under 3.1% portfolio value in energy and a little over 4% portfolio income.

So I don't consider myself overly exposed to energy currently. I am also sitting on about 10% cash right now that I'd be happy to put to work. I would be comfortable with doubling my current energy weighting (in both income and value)


----------



## godblsmnymkr

why not wait to buy until oil prices turn around instead of bottom fishing?


----------



## 0xCC

godblsmnymkr said:


> why not wait to buy until oil prices turn around instead of bottom fishing?


Valid question especially given the recent $20 oil call by I think Goldman Sachs...

Personally I rather wait out drop in prices rather than pay a higher price for the stock . In other words, if oil does go to $20 and say HSE goes to $10 I'd rather be in that position than pay $30 for HSE if oil goes to $60. Assuming that the company can survive the $20 price for however long that oil price lasts...


----------



## HaroldCrump

godblsmnymkr said:


> why not wait to buy until oil prices turn around instead of bottom fishing?


What is your leading indicator for judging whether the turnaround is temporary or a true uptrend?
Just in the last 1 year, we have had 2 bounces at least.


----------



## Nordic

HaroldCrump said:


> What is your leading indicator for judging whether the turnaround is temporary or a true uptrend?
> Just in the last 1 year, we have had 2 bounces at least.


Lol that's what I was thinking. People are always saying "wait until a turnaround", but how the heck do they know if it's a temporary bounce and they're buying in at a temporary high?


----------



## godblsmnymkr

HaroldCrump said:


> What is your leading indicator for judging whether the turnaround is temporary or a true uptrend?
> Just in the last 1 year, we have had 2 bounces at least.


technically for it to break out of its long downtrend in price and hold the gains for awhile and the macro factors causing downward pressure on prices to clear up.


----------



## blin10

godblsmnymkr said:


> technically for it to break out of its long downtrend in price and hold the gains for awhile and the macro factors causing downward pressure on prices to clear up.


If it was that simple you wouldn't be posting on CMF and would be on a yacht with 10 chicks somewhere in the Caribbean. I use technical analysis as well (and know it inside out), but hate when people say something like "just wait for a bottom and then buy", those people usually have nothing or close to nothing invested with their $10,000 portfolios.


----------



## godblsmnymkr

blin10 said:


> If it was that simple you wouldn't be posting on CMF and would be on a yacht with 10 chicks somewhere in the Caribbean. I use technical analysis as well (and know it inside out), but hate when people say something like "just wait for a bottom and then buy", those people usually have nothing or close to nothing invested with their $10,000 portfolios.












i'm just using USO as a metric here.
clear downtrend going back to summer last year. clear resistance in the $20 area. why buy inside that downtrend line? 
i dont know anything about HSE fundamentals. however, the price of HSE has basically mirrored the price of oil since this downturn. HSE cant be that bad of a buy down here at these levels, i just think its unnecessarily risky to buy until oil turns around. believe me i want to buy energy stocks here but I'm going to be patient.
also, the macro influences on this negative price move in oil havent really changed yet. this is the most important factor to consider in all of this. 
 lol @ less then 10k in portfolio


----------



## 0xCC

So, has the downtrend been broken now? HSE itself is trading about 7% higher than when I last posted on this thread (in the 22.60's now, was in the 21.00 or so range the last time I posted).


----------



## tkirk62

0xCC said:


> So, has the downtrend been broken now? HSE itself is trading about 7% higher than when I last posted on this thread (in the 22.60's now, was in the 21.00 or so range the last time I posted).


By waiting for the technical analysis to tell you to buy you've missed that 7%. That's my biggest problem with TA I think. You identified what you think is a good company, you had a price you thought was good ($21) but thought you had to wait for it to "breakout and hold the gains" and now to buy that same good company you have to pay 7% more.

To answer your real question though. I don't know the technicals, but the biggest thing that will affect Husky's price is the price of oil. If you have ideas about that then use that to guide you. I don't however, so I would just concentrate on finding the energy companies you identify as good companies and you would be happy holding and buy that at what you would think is a good price. Examining the chart of HSE won't be able to tell you where the price of oil is going.


----------



## 0xCC

I completely agree with your observations on both TA and HSE vs. the price of oil. I'm just wondering if the downtrend in USO that godblsmnymkr identified above has been broken now or not.

I think we are entering a typically weak season for oil prices so if history is any guide oil prices should be going down until the end of the year and maybe into January and February before turning up again. Looking at the recent oil price moves it seems like maybe this year is going to be different (I'm sure no one has ever said that before ).


----------



## godblsmnymkr

tkirk62 said:


> By waiting for the technical analysis to tell you to buy you've missed that 7%. That's my biggest problem with TA I think. You identified what you think is a good company, you had a price you thought was good ($21) but thought you had to wait for it to "breakout and hold the gains" and now to buy that same good company you have to pay 7% more.
> 
> To answer your real question though. I don't know the technicals, but the biggest thing that will affect Husky's price is the price of oil. If you have ideas about that then use that to guide you. I don't however, so I would just concentrate on finding the energy companies you identify as good companies and you would be happy holding and buy that at what you would think is a good price. Examining the chart of HSE won't be able to tell you where the price of oil is going.


thats a very results oriented, short term way of thinking. how many dead cat bounces have there been in this stock since june 2014? multiple 15-20% moves, only to roll over to further lows. I'm stalking entries into oil here but still sitting on my hands. bearish report today on USA oil reserves and production. so far oil is holding around breakeven for the day which is very positive. i certainly think this could be "the bottom" but why do you want to be jumping in here trying to catch the exact bottom? that sort of thinking would have gotten you CRUSHED on the way day. the bull case for oil is guilty until proven innocent. 
“I will tell you my secret if you wish. It is this: I never buy at the bottom and I always sell too soon.” – Baron Rothschild


----------



## tkirk62

IT does seem we are entering a poor seasonality for oil prices. That's one point for HSE to go down. Another I think will be tax loss selling. Once December comes I think the whole sector could be hit hard. For that reason I plan to look into the energy sector at the end of December/start of January. It may not be the bottom but value should be there.


----------



## tkirk62

godblsmnymkr said:


> thats a very results oriented, short term way of thinking. how many dead cat bounces have there been in this stock since june 2014? multiple 15-20% moves, only to roll over to further lows. I'm stalking entries into oil here but still sitting on my hands. bearish report today on USA oil reserves and production. so far oil is holding around breakeven for the day which is very positive. i certainly think this could be "the bottom" but why do you want to be jumping in here trying to catch the exact bottom? that sort of thinking would have gotten you CRUSHED on the way day. the bull case for oil is guilty until proven innocent.
> “I will tell you my secret if you wish. It is this: I never buy at the bottom and I always sell too soon.” – Baron Rothschild


I have no intention of catching the bottom. I do look at some technical matters. At times it ways into my decisions. But I also know good companies are good companies. If I did an analysis of the stock and thought it was good value of $21, even if I thought it could go a bit lower, then I would buy it at $21. Maybe a part position and then get the rest of the position at either a lower price or after it breaks out a bit (but not over what I deem to be a good price with a reasonable margin of safety).

But enough with the technical fight, I'm sorry I brought that up. godblsmnymkr I think there's probably downside left for oil stocks based on seasonality (a TA factor I look at often), tax loss selling to come, and the bearish report you mention which I will have to look into. I think there will be lower prices for most of these stocks in the next few months so I will be sitting on my hands with you.


----------



## godblsmnymkr

ya, if you really understand a company and have conviction that temporary market sentiment is wrong then not worrying about price too much is fine. i would just rather have price match up with my thesis. they dont call it a value TRAP for no reason.


----------



## godblsmnymkr

http://www.bloomberg.com/news/artic...n-downgrade-alert-as-credit-raters-take-stock

could be more pain ahead when companies actually do start getting downgraded.


----------



## besmartrich

godblsmnymkr said:


> http://www.bloomberg.com/news/artic...n-downgrade-alert-as-credit-raters-take-stock
> 
> could be more pain ahead when companies actually do start getting downgraded.


More volatility, more of my cash will be put into market


----------



## godblsmnymkr

this 2 day move in oil is an example of way you wait for a trend to reverse before you invest in the sector. oil needs to hold current trend line or price will most likely be back to price at early october.

informative article to read 

http://seekingalpha.com/article/3569456-oil-20-or-70


----------



## Getafix

HSE at 52w lows. Any idea why this is lagging behind while several oil majors are green for the day? Bad earnings expected?


----------



## HaroldCrump

Yes, how bad the earnings will be are unknown at this time, incl. capex cuts, job cuts, dividend, etc.
Many other oil major earnings have already come through in the last couple of days.


----------



## HaroldCrump

...and BAAM !! Cash dividends suspended, replaced with scrip dividends


----------



## 0xCC

HaroldCrump said:


> ...and BAAM !! Cash dividends suspended, replaced with scrip dividends


Wait, what? 

Oh great (from here: http://www.huskyenergy.com/news/release.asp?release_id=2002516):


> The quarterly dividend will be issued in the form of common shares on January 11, 2016 to all shareholders of record at the close of business on November 27, 2015.


The dividend is still $0.30/quarter though. So how exactly do they figure out the number of shares to give out (i.e. how is the stock price determined)? What happens to fractional shares?

I wonder if this latest round of earnings will knock Husky off TDDI's Action Buy List. 

As an aside, I bought in on Tuesday at $20.38. I feel pretty dumb today....


----------



## HaroldCrump

I am not happy, either.
I hate scrip dividends, DRIP discounts & similar shell games.
You either have a cash flow problem, or you don't - if you do, reduce/eliminate the dividend; if not, don't play games.

The company is not in any financial problems (yet) - the only issue is cash flow for dividend.
Just reduce the dividend by 50% & move on...the yield will still be fairly high.

Cutting the dividend would also have given them the opportunity to buy up more assets on the cheap.

It is clear from the market reaction that the market is treating this as a dividend cut.


----------



## 0xCC

Yeah, the games are not great and now that the market is treating it as a dividend cut the dilution is going to be worse.

Is there a standard calculation for how stock dividends work? Is it something like the average stock price for the 5 days before the record date or something like that? Or does the company get to define how many shares are granted as a dividend per share owned?


----------



## godblsmnymkr

I think the only energy companies you want to be involved in right now are refiners. the bearish thesis I've heard is that a lot of these upstream companies have price hedges on right now, but those are going to come off in 2016 and thats when the real pain will start.
there arent really any pure play refiners in canada are there? low oil prices will be a tailwind for their profits in 2016. VLO for example just beat Q3.


----------



## HaroldCrump

0xCC said:


> Is there a standard calculation for how stock dividends work? Is it something like the average stock price for the 5 days before the record date or something like that? Or does the company get to define how many shares are granted as a dividend per share owned?


The company does indeed fix the share price at which the scrip will be paid, however, it is usually based on an average of past few trading days.
A typical formula I have seen used by other companies is the average closing price of last 5 trading days starting with the X date.

Partial shares are possible in case of company sponsored DRIP/Scrip.
I am not sure how Husky will handle residual value - whether partial shares will be issued or cash.
A quick call to company's I/R should answer that question, if you want to find out before January.


----------



## gibor365

> I am not sure how Husky will handle residual value - whether partial shares will be issued or cash.


 this is a good question


----------



## avrex

wow.

I've held HSE for 10 years and have enjoyed their dividend over that time. 
I must admit, this is the first time that I've heard of a scrip dividend.

I feel as if I want to sell it now.

I wonder what people who currently enjoy the Canadian Dividend Tax think about this.
"Hey investor, we're not going to give you a dividend any more. Instead, here's some shiny new shares instead."

I'm very upset. :upset:


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## HaroldCrump

Market is pricing in a massive dilution because of the huge yield.

Problem with scrip dividends is that if/when oil market "normalizes" (whatever that means), they will on the hook for cash dividends to all the new shares they are spinning off now.
Then they will have to spend yet more cash to buy back shares at a higher valuation.

I think Asim Ghosh got up on the wrong side of the bed this morning.
I didn't expect this from him.


----------



## AltaRed

All cyclical stocks disappoint eventually and one must be prepared for it. IOW, few, if any, are buy and hold stocks. They are trading stocks. I provide the links below for your absorption.

http://www.bankofcanada.ca/2015/04/workshop-commodity-super-cycles/ and one presentation therein http://www.bankofcanada.ca/wp-conte...ends-supercycles-energy-lme-metals-prices.pdf Slides 29 ad 32 are not encouraging for both investors AND resource based economies. Is Canada in for a long period of stagnation after a wonderful first decade of this century?


----------



## Canuck

I bought in last week at 21.40  crap


----------



## 0xCC

godblsmnymkr said:


> I think the only energy companies you want to be involved in right now are refiners. the bearish thesis I've heard is that a lot of these upstream companies have price hedges on right now, but those are going to come off in 2016 and thats when the real pain will start.
> there arent really any pure play refiners in canada are there? low oil prices will be a tailwind for their profits in 2016. VLO for example just beat Q3.


"Husky Energy Inc. (Husky) is an international integrated energy company. The Company operates in two segments: Upstream and Downstream. "
Part of the reason I am even interested in this company is that it is an integrated play. Of course that isn't a pure upstream play but as you say I don't think there are really any of those available in Canada.



Canuck said:


> I bought in last week at 21.40  crap


Now I don't feel quite so bad about my $20.38 purchase. I didn't expect to see the mid-17's even this morning though. I wonder what the odds are for a reversal of this scrip dividend and a dividend cut next quarter given the market reaction today?


----------



## Tawcan

Not too happy about the script dividend for Q4. Probably better off cutting the dividend payout. Not happy at all.


----------



## Canuck

heard them talking on BNN and saying that it may be that (depending on oil prices I guess?) some months are paid in shares and some months maybe in cash, or a combination of both? something like that.

Not sure if the analyst heard that from the company or was just assuming


----------



## gibor365

> I wonder what the odds are for a reversal of this scrip dividend and a dividend cut next quarter given the market reaction today?


 I doubt that they gonna reverse scrip dividend any time soon, but they can decrease it and leave scrip  . Also I very doubt that cutting dividends would lead to more modest decline in share price..., 
btw, I sent in the morning email to IR asking about partial shares....still no reply... maybe too many investors asking same question or .... Husky doesn't know by themselves


----------



## HaroldCrump

gibor said:


> I doubt that they gonna reverse scrip dividend any time soon, but they can decrease it and leave scrip


It's not going away anytime soon...I think they are just preparing themselves for further writedowns & stock price declines.

From the company's perspective - scrip dividends have one advantage over cash dividends - they automatically adjust to lower share price without having to explicitly "cut" the dividend i.e. if stock falls, more # of shares are issued and vice versa.

The key shareholder - Li ka Shing (and his family) - will be accumulating massive # of shares based on compounding alone.

Also hearing that many funds/institutions that have dividend mandate might be selling their shares because scrip dividend does not count the same as cash dividend and impacts the fund's target cash distributions.

This was a poor decision.


----------



## doctrine

This is pretty big news. Remember, Husky is a refiner. They refine as much as they produce. If you think it's bad for them, how do you think those oil production companies are going to look when their hedges roll off in the next few months?


----------



## gibor365

> The key shareholder - Li ka Shing (and his family) - will be accumulating massive # of shares based on compounding alone.


 yes, but they can always sell shares they got from scrip dividends, it's no like me who gonna get 3 shares


----------



## HaroldCrump

Li aint selling one single stinkin' share...you will have to pry them (as the saying goes) from his cold, d*d fingers (God bless his heart).


----------



## gibor365

HaroldCrump said:


> Li aint selling one single stinkin' share...you will have to pry them (as the saying goes) from his cold, d*d fingers (God bless his heart).


I hope he doesn't  However in 2005, he sold his $1.2 billion CAD stake in CIBC and spent all for charities ...

I like this guy  "in 2013, sponsored US$130 million to create The Technion Guangdong Institute of Technology with the cooperation between Technion – Israel Institute of Technology and Shantou University. The new institute aims to bring a new era of research and innovation in science, engineering, and life science in China."


----------



## AltaRed

doctrine said:


> This is pretty big news. Remember, Husky is a refiner. They refine as much as they produce. If you think it's bad for them, how do you think those oil production companies are going to look when their hedges roll off in the next few months?


I am not sure they refine as much as they produce. I believe Lima is 155kpd and Toledo (Husky share) is 80kpd. Their only other pure refinery is Prince George at 12kpd. The Lloyd upgrader and the asphalt refinery don't really count albeit both are good businesses at certain times. That said, it is 'helpful' to to be at least partly integrated to soften the blow.


I agree, baring a significant price shift, upstream only companies will be worse off as the hedges roll off over the next 12-18 months. Not many hedges beyond mid-2016. 

Still no personal plans to dip my toes further into O&G companies. My partial position in CNQ bought in 4Q14 is all I have and is enough.


----------



## Canuck

Do you guys think this decision could be reversed if Oil got back to around $60?


----------



## AltaRed

Canuck said:


> Do you guys think this decision could be reversed if Oil got back to around $60?


The Board can change their decision at any time on a 'go foward' basis, i.e. next dividend. Not really doable (or more importantly smart) to change it retroactively.


----------



## HaroldCrump

Canuck said:


> Do you guys think this decision could be reversed if Oil got back to around $60?


They have said their current financial position is secure with the assumption of WTI at $40 and Alberta gas at $3.
So WTI at $60 will definitely be very positive for them.

That being said, WCS discount spread has widened recently.
Canadian producers are receiving around $31 these days, with WTI around $42 - $45.


----------



## godblsmnymkr

0xCC said:


> "Husky Energy Inc. (Husky) is an international integrated energy company. The Company operates in two segments: Upstream and Downstream. "
> Part of the reason I am even interested in this company is that it is an integrated play. Of course that isn't a pure upstream play but as you say I don't think there are really any of those available in Canada


Downstream is not the same as refining. Downstream is selling refined product to the consumer. Not sure if husky owns refineries.
Downstream def benefits from lower oil prices.


----------



## avrex

Even though I lose the dividend on the common share, I guess there's one silver lining for me.
On Sept 24th, I bought my first ever preferred share..... the Husky Energy Inc. 4.50% Ser 5 (HSE-PE.TO).

Reading the Husky press release, they confirm that this action does not affect their preferred shares.


----------



## HaroldCrump

Target prices have been lowered.
Not sure how the stock will react today...oil is trading down from Friday's close as well.
Basically, the market has priced this management decision as a combination of dividend cut + massive dilution.
It is almost as if company eliminated its dividend and issued several hundred million new shares as well...


----------



## 0xCC

And TDDI's Morning Action Note this morning takes Husky off the "Action List Buy", basically they got downgraded from an Action List Buy rating to just a Buy rating, taking $2 off their 12-month $31.00 target price which is now $29.00 and is still as believable as the $31.00 target was last month. 

I am now convinced that the TD analysts (like most analysts) have no idea how to value oil and gas companies in this environment and don't have any special insights into what management might be thinking. In the last 3-4 months they have called both HSE's and CPG's dividends stable and unlikely to be cut. Now both of them have effectively cut their dividend since.

I think really the only reason they have moved to the stock dividend model even though it appears as though the market is not happy with the move is that they have a single controlling shareholder. If that shareholder (which I think owns 70% or so of the company) thinks that the stock dividend was the best way to go then that is the way the company goes...


----------



## HaroldCrump

0xCC said:


> I think really the only reason they have moved to the stock dividend model even though it appears as though the market is not happy with the move is that they have a single controlling shareholder. If that shareholder (which I think owns 70% or so of the company) thinks that the stock dividend was the best way to go then that is the way the company goes...


You are right that ~ 70% of HSE is owned by Li Ka-shing & his family (either directly or through subsidiaries).
This scrip dividend model will generate massive compounding effect for him, as more shares attract yet more shares in dividend.

It would be interesting to know if Li is increasing his stake at these levels.

Stock dipped below $17 at open this morning...so who is buying at these low & mid $17 range...is Li one of the buyers.


----------



## AltaRed

I believe there are some regulatory requirements regarding public disclosure for a controlling shareholder increasing stake. Similar to buybacks, etc.


----------



## HaroldCrump

True, but it takes a couple of months before that data is available publicly. I was just wondering about the sell off that started last Friday.


----------



## daddybigbucks

HaroldCrump said:


> You are right that ~ 70% of HSE is owned by Li Ka-shing & his family (either directly or through subsidiaries).
> This scrip dividend model will generate massive compounding effect for him, as more shares attract yet more shares in dividend.
> 
> .


So its safe to say that Li is considering changing his last name to Ka-Ching !?


----------



## 0xCC

godblsmnymkr said:


> Downstream is not the same as refining. Downstream is selling refined product to the consumer. Not sure if husky owns refineries.
> Downstream def benefits from lower oil prices.


According to their website they do have refining capacity:


> Husky actively markets commodities and refined products. It is engaged in all aspects of the wholesale marketing of crude oil, natural gas, natural gas liquids, asphalt, petroleum coke and sulphur.
> 
> Operations include the refining, marketing and distribution of gasoline, diesel, jet fuel, asphalt, ethanol, lubricants and ancillary services in Canada and the United States.


 (from http://www.huskyenergy.com/huskyproducts/)

Also from their website (http://www.huskyenergy.com/operations/downstream/default.asp):


> Downstream operations include commodity marketing, pipeline transportation and storage, upgrading and refining crude oil and marketing gasoline, diesel, jet fuel, asphalt, ethanol and related products in Canada and the United States.
> 
> Husky has an upgrader in Lloydminster, Saskatchewan, an asphalt refinery in Lloydminster, Alberta, ethanol plants in Minnedosa, Manitoba and Lloydminster, Saskatchewan and refineries in Prince George, B.C. and Lima, Ohio. It also has a 50 percent ownership interest in a refinery in Toledo, Ohio.


So they should be benefiting from the current crack spread (here in Ontario with oil in the $90 range we were seeing gas in the $1.30/litre area, now with oil under $50 we get to pay around $0.95-$0.99/litre or so). I haven't looked closely at their financials to find out how big the refining operations are compared to their other operations.


----------



## AltaRed

I reported up above about their refining capacity and locations. Prince George, Toledo and Lima. IOW, not much in Canada and nothing in the east as expected.


----------



## HaroldCrump

0xCC said:


> So they should be benefiting from the current crack spread (here in Ontario with oil in the $90 range we were seeing gas in the $1.30/litre area, now with oil under $50 we get to pay around $0.95-$0.99/litre or so).
> I haven't looked closely at their financials to find out how big the refining operations are compared to their other operations.


It's broken down nicely on page 7 & 8 of their quarterly report.
For further details on their downstream activities, read pages 16 - 19 of the MD&A.
Gross margins for all their downstream operations are there.


----------



## Tourist9394

Smart move in Li Ka Shing's point of view to be honest: 

Husky Energy has been personal bank of LKS since CAD/USD was at almost parity, the company issued bonds to funnel money back to Hong Kong for other investments in his empire. Now LKS is selling much of his Hong Kong assets to diversify into Britain and Overseas, there is no need to help Husky at a higher stock price anymore. Sad to see many Western shareholders robbed of their hard earned monies, we Hong Kongers never buy any of the LKS apartment units, they are notoriously crappy. I am quite glad I didn't buy LKS stocks also, though his Hong Kong holdings is doing surprisingly well this year.


----------



## besmartrich

Tourist9394 said:


> Smart move in Li Ka Shing's point of view to be honest:
> 
> Husky Energy has been personal bank of LKS since CAD/USD was at almost parity, the company issued bonds to funnel money back to Hong Kong for other investments in his empire. Now LKS is selling much of his Hong Kong assets to diversify into Britain and Overseas, there is no need to help Husky at a higher stock price anymore. Sad to see many Western shareholders robbed of their hard earned monies, we Hong Kongers never buy any of the LKS apartment units, they are notoriously crappy. I am quite glad I didn't buy LKS stocks also, though his Hong Kong holdings is doing surprisingly well this year.


Thanks for your inside Hong Konger knowledge. I have held HSE for sometime and hope this reverts itself back to the game. Most of the loss is related to impairment anyways. As long as oil recovers, impairment loss would be recovered and hope the stock would as well.


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## gibor365

> This scrip dividend model will generate massive compounding effect for him, as more shares attract yet more shares in dividend.


 Maybe he was already DRIPing his shares 

btw, got answer from Husky IR


> Yes, as you are aware the Q3 dividend declared on Friday, and to be paid on January 11, will be paid in common shares. Any fractional shares that result from the dividend calculation will be held for you by Computershare. Once a whole share has accumulated, that whole share will be transferred to you.
> 
> If you would like to contact Computershare specifically, their Shareholder Services department can be reached at 1-800-564-6253.


My understanding that I won`t see those partial shares on my IE account and they will be stored somewhere at Computershare ? Now, what gonna happen if I sell All HSE shares? Next day i gonna get partial shares sell from Computershare ?


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## 0xCC

I got my first stock dividend this week. It looks like I received some cash as well as shares. It also looks like I got shares at a higher than market price. It seems like I "paid" $14.086/share based on how much cash how many shares I received and a $0.30/share dividend.

This is how the stock has traded in the last 10 days (cash and stocks showed up in my account on Jan 13 but Husky's dividend announcement says it would pay out on Jan 11).

Jan 13, 2016	12.49
Jan 12, 2016	12.78
Jan 11, 2016	13.04
Jan 8, 2016 13.40
Jan 7, 2016 13.25
Jan 6, 2016 14.24
Jan 5, 2016 14.70
Jan 4, 2016 14.30
Dec 31, 2015 14.31
Dec 30, 2015 14.13
Dec 29, 2015 14.65

So if we do a 5 day average of Jan 4-8 we get $13.978, backing up one day a 5 day average of Dec 31-Jan 7 is 14.16. If they are using a 5 day average nothing seems to make sense. If they are using a closing price, nothing seems to make sense...

Does anyone have an idea about how they might have calculated the price of the stock for the dividend?


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## ONoob

After subtracting the cash received in lieu, it is $13.98 / sh for me.


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## 0xCC

If I ended up with something in the 13.97 or 13.98 range I would understand the number, but the $14.086 I got doesn't make sense to me. The difference between my calculated $14.086 and something in the $13.98 range makes less than a dollar difference for me but I'd like to have a better understanding of how the price is arrived at.

I am with TDDI, I wonder if maybe there are differences from broker to broker (I would hope not but it could be possible).


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## gibor365

ONoob said:


> After subtracting the cash received in lieu, it is $13.98 / sh for me.


got exactly the same 13.98 and some cash-liue..

CIBC IE has very friendly interface, didn't need caclulate anything "


> HUSKY ENERGY INC COMMON
> STK DIV ON XXX SHS REC 11/27/15 PAY 01/11/16 THE STOCK PRICE $13.98


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## Flash

Can HSE maintain the dividend even at 30$/barrel? Looks like a great stock for dividend and long term and wait for oil to bounce back in a few/several years.


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## My Own Advisor

I've wondered the same Flash. Hard to say. If oil stays around $30 for a long time, as in a few years, I doubt HSE, SU, as big as they are, can sustain any dividend at all. They will survive but not without major job cuts coming over that period.


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## treva84

My Own Advisor said:


> I've wondered the same Flash. Hard to say. If oil stays around $30 for a long time, as in a few years, I doubt HSE, SU, as big as they are, can sustain any dividend at all. They will survive but not without major job cuts coming over that period.


It's an interesting question - HSE and SU both have downstream operations which benefit from the low price of oil. At least that will generate some cash flow for each company.

I would think HSE (and SU) would do everything they possibly could to _avoid_ a dividend cut because it would probably send the remaining shareholders for the hills.


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## My Own Advisor

I would agree Treva84.


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## 0xCC

HSE isn't paying out cash right now, only shares. So their dividend doesn't really impact cash flow. The problem HSE has now is they have to grow earnings at better than around 2% a quarter just to keep their EPS the same. The stock dividend is creating about 2% more shares every quarter.


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## Flash

0xCC said:


> HSE isn't paying out cash right now, only shares. So their dividend doesn't really impact cash flow. The problem HSE has now is they have to grow earnings at better than around 2% a quarter just to keep their EPS the same. The stock dividend is creating about 2% more shares every quarter.


I received cash for my shares for the last distribution on 1st October.



My Own Advisor said:


> I've wondered the same Flash. Hard to say. If oil stays around $30 for a long time, as in a few years, I doubt HSE, SU, as big as they are, can sustain any dividend at all. They will survive but not without major job cuts coming over that period.


I want to invest some more into oil, I stopped from BTE to CPG and now looking for big producers to diversify my bounce back plans for when oil stabilizes and will start increasing, whenever that happens.

I like SU but it's extremely expensive, and the dividend is really small when I could invest in Utilities/Banks/Telecos for a much better yield and much lower risk. Therefore looking at HSE as an option. My opinion is that HSE is in a much better position than CPG?


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## 0xCC

Flash said:


> I received cash for my shares for the last distribution on 1st October.


The most recent dividend payout was this past week on January 11. It didn't show up in my account activity until January 13 though. That payout was the first stock dividend payout. If you held the stock on November 27 you should have received mostly stocks and a little bit of cash (at most around $14 of cash).


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## avrex

*After holding Husky for 10 years.....*

....I think I'm going to sell it.

no, not because of the bad fundamentals in the overall energy sector (although, that's a part of it.)

The final straw is the Husky change that now pays out their dividends with newly created shares.

I don't like it.


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## Flash

0xCC said:


> The most recent dividend payout was this past week on January 11. It didn't show up in my account activity until January 13 though. That payout was the first stock dividend payout. If you held the stock on November 27 you should have received mostly stocks and a little bit of cash (at most around $14 of cash).


January 11? I have no transaction from HSE on Jan 11. Also no new shares (I do have very little, only 45). If it was suppose to be a distribution on that date but it's now shares only (and I have too little shares to get anything) I am very upset. Am I now basically getting nothing?


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## 0xCC

Ok, 45 shares, at $0.30/share = $13.50 which wasn't enough to buy a share so you probably got all cash.

From here http://www.huskyenergy.com/investorrelations/dividendinformation.asp:



> On October 29, 2015 the Board of Directors approved a quarterly dividend of $0.30 Cdn per common share for the three-month period ended September 30, 2015. The quarterly dividend will be issued in the form of common shares on *January 11, 2016* to all shareholders of record at the close of business on November 27, 2015.


The dividend before the one paid out on January 11 was paid out on October 1 and that one was paid as cash. The January 11 dividend is the first stock dividend.

I promise I am not making this stuff up.


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## Flash

0xCC said:


> Ok, 45 shares, at $0.30/share = $13.50 which wasn't enough to buy a share so you probably got all cash.
> 
> From here http://www.huskyenergy.com/investorrelations/dividendinformation.asp:
> 
> 
> 
> The dividend before the one paid out on January 11 was paid out on October 1 and that one was paid as cash. The January 11 dividend is the first stock dividend.
> 
> I promise I am not making this stuff up.


Well that's the thing, I did not receive cash on the 11th Jan. Didn't receive anything from HSE. Will call my brokerage to find out about this on Monday.


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## Moneytoo

0xCC said:


> If I ended up with something in the 13.97 or 13.98 range I would understand the number, but the $14.086 I got doesn't make sense to me. The difference between my calculated $14.086 and something in the $13.98 range makes less than a dollar difference for me but I'd like to have a better understanding of how the price is arrived at.
> 
> I am with TDDI, I wonder if maybe there are differences from broker to broker (I would hope not but it could be possible).


Looks like there's, I'm with Questrade, got two shares on Jan 13th - and there're no prices listed, as usually:



> HUSKY ENERGY INC COMMON STK DIV ON 105 SHS REC 11/27/15 PAY 01/11/16


and $3.30 on Jan 14th:



> HUSKY ENERGY INC COMMON CASH IN LIEU OF .25322 REC 11/27/15 PAY 01/11/16


I had 105 shares before the dividend, so (105 x $0.30 - $3.30) / 2 = *$14.10 per share*. Last time the shares traded above $14 was on January 7th, so I guess both TDDI and Questrade reinvest the dividends on the ex-dividend date?


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## Franky Jr

Just called TDW as my 3 HSE.TO shares were dripped at $14.46. I checked Husky website and they posted the 5 day volume weighted average price as $13.98.
TD said basically call Husky, they say they were essential given 3 shares for me plus the remainder in cash from Husky so I should take it up with them.
(It's under $2 but I think we all think this share program is garbage so the least they could have done was give me the shares at the price they post).


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## Jungle

I sold husky last year after owning it for 5 years. Got lucky with the timing compared to todays price , but not so lucky with other stocks (cos)


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## 0xCC

Franky Jr said:


> Just called TDW as my 3 HSE.TO shares were dripped at $14.46. I checked Husky website and they posted the 5 day volume weighted average price as $13.98.
> TD said basically call Husky, they say they were essential given 3 shares for me plus the remainder in cash from Husky so I should take it up with them.
> (It's under $2 but I think we all think this share program is garbage so the least they could have done was give me the shares at the price they post).


I agree, something strange is going on here. As I said for me it makes less than a dollar difference ($14.08 vs $13.98) but if the shares are going to shareholders at $13.98 they should go to all shareholders at $13.98.


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## OurBigFatWallet

Husky (stock) dividend has been suspended. http://www.theglobeandmail.com/repo...ing-and-production-forecasts/article28271531/


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## AltaRed

OurBigFatWallet said:


> Husky (stock) dividend has been suspended. http://www.theglobeandmail.com/repo...ing-and-production-forecasts/article28271531/


More and more dominoes are going to fall in the sector. Barring a significant increase in oil price by mid-year, we may have seen nothing yet.


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## My Own Advisor

Agreed. Time to hold on! HSE is an integrated O&G player, it should survive but not without some pain.


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## 0xCC

That dividend cut is surprising. I wonder if the actual mechanics of doing a stock dividend just that one time had an impact on their decision.

Any guesses on other integrated players that might adjust their dividend?


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## treva84

0xCC said:


> That dividend cut is surprising. I wonder if the actual mechanics of doing a stock dividend just that one time had an impact on their decision.
> 
> Any guesses on other integrated players that might adjust their dividend?


Hopefully not Suncor! Q4 earnings set to be reported early Feb... I guess we'll find out soon.


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## 0xCC

Suncor is the company I was thinking about. I'm wondering if the COS purchase combined with sub-$30 oil will be enough for SU to at the very least roll back the dividend increase from their last earnings announcement if not make larger adjustments.

The thing about HSE's dividend cut yesterday that baffles me is what was the point of going to a stock dividend a couple of months ago if you knew that if oil got to this level you would have to cut the dividend completely anyway? If you didn't think you would have to cut the dividend completely with oil at this level back in November then you didn't forecast very well. If you didn't think that oil would get this low then why switch to a stock dividend anyway? If you were just hoping and praying that oil would stay at a level where you could keep the stock dividend going then it seems like you should have reduced the dividend anyway and maybe even still made it a stock dividend.

The fact that HSE has made this dividend cut so soon after making the switch to a stock dividend really confuses me.


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## My Own Advisor

I suspect senior management didn't know the extent of the impact until they had time to run the numbers. Nobody in the oil sands could/can sustain a dividend, _I suspect_, with prolonged sub-$30 oil. 

More dividend cuts are coming...including 50% cut to SU dividend. Just a hunch.


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## Moneytoo

Alert from Questrade: HSE.TO went down by 10%

Sigh...


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## 0xCC

If they didn't know the extent of the impact until they had time to run the numbers then why make a change before running the numbers? Also if they don't have some rough numbers at hand at all times for some round-number oil prices why not? If they got to the point where they knew they had to do something with the dividend why not firm up those rough numbers a little bit before actually making a final decision on the change to the dividend?

I'm not suggesting that they shouldn't have done exactly what they did to the dividend yesterday, I'm just confused about why just a couple of months ago they decided that they could keep paying out a stock dividend without reducing the dividend and now they have to completely cut the dividend. Bad news is bad news, take the lumps hard and early so you don't have to do this bad news after bad news approach.

As for Suncor, I won't be surprised to see a dividend adjustment coming either. I don't know how big of an adjustment to expect but I wonder how profitable Syncrude can be at sub-$30 oil (even given a sub-69 cent Canadian dollar).


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## avrex

avrex said:


> ....The final straw is the Husky change that now pays out their dividends with newly created shares.
> I don't like it.


Well, I guess I can stop complaining now.


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## gibor365

Just curious if HSE holders sold it after dividend suspension or still hold it?


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## avrex

Hi @gibor, I am currently holding it, but.....
I am researching other Energy stocks to find a replacement for Husky in my portfolio.


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## gibor365

avrex said:


> Hi @gibor, I am currently holding it, but.....
> I am researching other Energy stocks to find a replacement for Husky in my portfolio.


I'm on same page  Was thinking to replace it with SU or CNQ, imho, those 2 guys will be the last one to cut/suspend dividends...

Even if WTI until end of year raises above $40, I doubt HSE will reinstate dividends...


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## AltaRed

There is a rare possibilty CNQ could cut their dividend when they report 4Q results. It all depends on cash flow from both reduced oil and natural gas prices vs their capex needs for Horizon and the Upgrader. Their dividend, however, was always modest and is only in the 3% range now anyway.

Disclosure: I have a partial holding in CNQ... my only resource/commodity based stock.


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## Moneytoo

gibor said:


> Just curious if HSE holders sold it after dividend suspension or still hold it?


Holding - but it's less than 1% of our total portfolio, and we don't need the income. But glad that I didnt buy more for $25 last June (learned my lesson with CPG lol)


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## hboy43

I sold before the dividend cut on the theory it had not dropped sufficiently given the oil price rout. I rode down other companies. Bought back in the $15 range after the cut to hold more than I started with. Dividends are not magical to me.


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## My Own Advisor

Happy to hold. I don't see a multi-billion dollar integrated oil and gas company like this going under. If that happens, HSE won't be alone. HSE is less than 1% of my portfolio. No biggie.


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## besmartrich

gibor said:


> Just curious if HSE holders sold it after dividend suspension or still hold it?


Still holding it as well. The drop of stock price caught me offguard but the company isn't going anywhere. It will recover eventually.


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## Ag Driver

Deleted.


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## gibor365

besmartrich said:


> Still holding it as well. The drop of stock price caught me offguard but the company isn't going anywhere. It will recover eventually.


I'm still holding ... not only HSE, but also few others who cut dividends recently: POT, KMI, COP


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## OurBigFatWallet

Quarterly results are out, the loss isn't as bad as analysts expected. http://ca.reuters.com/article/businessNews/idCAKCN0VZ1F2


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## Tawcan

Been debating whether to sell HSE or not but decided to hold it. The company isn't going anywhere and believe they'll start paying dividends again once the low crude price storm is over.


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## avrex

Earnings reported on Friday. 
Husky Energy posts smaller-than-expected loss due to costs cuts.

The stock was up 4.5%
I'll take it.


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## Chris L

Smart management! Pick up yesterday and happy I did...and didn't ride this one down. Preparing for $30 oil is one of the best ways to look at the current scenario. Either way, you win.


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## cevans

still deciding? I got rid of POT and purchased HSE at 15.89]

anyone following the stock? it doesn't seem to be recovering all that much


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## AltaRed

The market did not like this http://www.theglobeandmail.com/repo...o-sell-assets-for-17-billion/article29756295/

Selling mid-stream assets and recording a net loss for Q1 and its dispute with CNOOC would dampen any price recovery.


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## Chris L

I sold HSE and bought CPG. Made about 5%, good enough. More upward pressure elsewhere.


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## Pluto

Good move. CPG, VET, are better for this recovery.


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## hollyhunter

HSE.TO: Bullish cross in Stochastic Oscillator and RSI(14) is in bull territory, which stands at 45.07.


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## jollybear

Since when does an RSI of 45.07 put something in bullish territory?? The RSI in actually showing a bearish divergence as compared to the last time it closed at yesterdays price


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## amack081

Posting a loss + spill in North Sask. River. Expect the stock to drop within the next few days.


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## gibor365

amack081 said:


> Posting a loss + spill in North Sask. River. Expect the stock to drop within the next few days.


Posting a loss of -0.20 , but estimate was -0.21, so they beat expectations  and +2% right now...

also:


> *Husky Energy could be in a position to reinstate its dividend in late 2016 or early 2017 and is in talks to sell another $200M in core assets, according analysts at CIBC.The firm thinks Husky could reinstate its dividend even if negotiations with Cnooc break down amid a dispute between the two companies over natural gas contracts.CIBC says Husky shares are "cheap as chips and could offer some near-term outperformance," as it maintains its $19 stock price target.*


So we'll see


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## amack081

gibor365 said:


> Posting a loss of -0.20 , but estimate was -0.21, so they beat expectations  and +2% right now...
> 
> also:
> So we'll see


Made me laugh. Up nearly 3% on the day. 
I would be aware of purchasing right now. I think there are many oil/gas companies that offer higher upside and less risk (especially taking into consideration the spill and no dividends).


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## gibor365

> I think there are many oil/gas companies that offer higher upside and less risk


 I doubt that many  .. if HSE reinstate their dividend, stock gonna gain , obviously depends on oil prices.


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## gardner

The analysts are reiterating the expectation of the dividend coming back, and now there's a (comparatively small) oil leak in Bragg Creak.
I am toying with using this dip to average down a bit, then, if the dividend comes back and the stock recovers a bit, evaluate whether to cut and run or hang on.


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## gibor365

I don't really understand prefs, but maybe it's worth to sell HSE and to buy HSE.PR.A?! HSE is close to 52 w low, HSE.PR.A at 52 weeks high. Even though HSE.PR.A cut dividends, they still give 3.6% yield, HSE suspended dividends long time ago. For 1, 3, 5 years HSE.PR.A greatly outperforming HSE. Then why HSE.PR.A is not so popular?


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## AltaRed

Prefs are nothing like common equity. They don't even travel in the same circles...except when insolvency looms or a 2008 type financial crisis.

Prefs move with bond yield sentiment (fixed rate resets often opposite that of pure perpetuals). HSE.PR.A is a fixed rate reset that resets every 5 years at GOC5+173 which means whatever the Govt of Can 5 year bond is trading at on reset day plus 173 basis points. It's last reset was March 31, 2016 and does not reset again until March 31, 2021...unless Husky calls it first. Its market price will reflect what market sentiment is for current alternatives vs what investors think the GoC5 bond rate will be in March, 2021. 

A number of fixed rate resets have recovered most of their losses after a disasterous 2015 in particular when the GoC5 yield was cratering and there was no hint of rising interest rates anywhere. GoC5 yield was as low as 0.6% yield a year ago versus about 1.5% now.

Added: Will the pref continue to climb? No one knows. What is your view of the GoC5 year yield curve over the next 3-4 years?


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## gibor365

Thanks Alta,
So I understand that current distribution is guaranteed until 2021 unless HSE goes bankrupr , right?
And with new reset in 2021 , if GOC rate drops to 0.6%, the next 5 years, dividends will be 2.33%?


> unless Husky calls it first


 what gonna be in this case? why they can call it off?

What is credit ranking of HSE.PR.A and where I can find it?

btw, do you personally hold any prefs?


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## AltaRed

gibor365 said:


> Thanks Alta,
> So I understand that current distribution is guaranteed until 2021 unless HSE goes bankrupr , right?
> And with new reset in 2021 , if GOC rate drops to 0.6%, the next 5 years, dividends will be 2.33%?
> what gonna be in this case? why they can call it off?
> 
> What is credit ranking of HSE.PR.A and where I can find it?
> 
> btw, do you personally hold any prefs?


Indeed, the yield (on $25 par) will stay the same until next reset date. if GOC5 is 0.6% at the next reset date, the yield will be 2.33% based on $25 par. Market price of the actual pref will recognize that rate and be less than $25 if the then prevailing market yields for prefs is 5% (which in this example, market price of HSE's pref would be in the order of (2.33/5)x25 = $11.65.

Husky will 'call' the pref if they believe they can get cheaper funding another way, including for example, calling this pref and re-issuing a new pref with a lower than 173 bp spread, or they can manage more bank (bond) debt at a lower rate. Generally speaking though, fixed resets with a low spread, e.g. 173bp, are less likely to ever be called because it is unlikely that a new yield at reset time will be 'above market'. Prefs with high spreads, e.g. 300bp, are more likely to be called, especially if GOC5 was to hit 3-4% for example at reset time.

Preferred shares are considered equity, not debt, so it depends on the balance sheet how a corporation wants to manage its debt (or their lenders demand certain undertakings). Big lenders impose certain conditions on secured debt and part of that is D/E ratio, capital ratio, etc. If a corp goes over these caveats, debt interest rate could increase, lenders could call debt, etc. So prefs fill a gap. Banks, utilities, and pipeline companies in particular like prefs due to the size of their debt loads.

The credit rating of HSE.PR.A would be the same as the credit rating of the debt of the company. Available from SEDAR, etc. 

I hold almost 7% of my portfolio in Prefs, mostly fixed reset types (5) and straight perpetuals (2). I do not hold any other kinds. See www.prefblog.com for a table that shows the various types and market price movements on an aggregated daily basis. I strongly recommend those interested in prefs to learn more for about a year by reading James Hyman prefblog online, or even subscribing to his PrefLetter for a period of time, e.g. a year or two.

Added: Prefs are complex beasts. Not to be taken lightly. I believe there is a Preferred Share thread on this forum. If not, Preferreds get a fair bit of air time on Financial Wisdom Forum and the long thread can be read there....start from latest page and work backwards perhaps.


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## gardner

Anyone follow Husky in any detail?

I want to rebalance my Oil and Gas sector holdings and am currently pretty underweight on HSE -- but this is because HSE has been a total dog since I've owned it. I am contemplating whether to double down on HSE or else sell it, take the loss, and buy CNQ instead, on the theory that CNQ's prospects seem firmer. I'm not sure what is the drain on HSE's price is, compared to CNQ or SU. Any opinions on how to deal with HSE going forward?

I originally picked HSE because it had operations outside the oil patch -- in particular on the east coast -- where the oil is conventional, not land-locked and generally commands higher prices. It also is a big player in syncrude, so it's less tied to the dilbit/WCS market. I also liked it because it was integrated, not just a crude producer. Obviously, it got kicked in the head by the oil crash, but unlike the others, seems to be continuing to decline.


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## AltaRed

FWIW, Husky does not have an interest in Syncrude, but it does move dilbit to its jointly owned refinery in Ohio. 

I don't follow Husky but my view is that it is involved in too many things (good from diversification), but not many of them are at significant scale. No one thing move the needle, whether it be their gas plays in Western Canada (gas is even a worse play than oil these past few years), their integrated dilbit/refinery (Lloyd/Prince George/Toledo) operations, the gasoline retail network, NF offshore light, or their Asia Pacific offshore operations. Think they would have been better off with highly efficient and competitive operations in just a few places for economy of scale.....but that is just my speculative opinion.

It may be that there is a discount for being majority owned (70%) by Chinese (Li Ka-Shing) interests? His interests are not necessarily aligned with North American shareholder interests. I wouldn't touch it for this reason alone.


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## gardner

AltaRed said:


> FWIW, Husky does not have an interest in Syncrude, but it does move dilbit to its jointly owned refinery in Ohio.


Right. I should have said "synthetic crude" which their Lloydminster upgrader outputs. At the time I bought them, their synthetic crude operation was one of the biggest. Dunno how big it is now -- 50mbbl/day?

I think you're right about the Li Ka-Shing factor.

Edit: looks like Husky is 80mbbl/day vs Syncrude's 350mbbl/day


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## AltaRed

Its downstream assets are really scattered and other than Toledo, are relatively small scale. https://huskyenergy.com/operations/downstream.asp 

The latest news that I know of on Husky https://globalnews.ca/news/5326573/husky-energy-oil-production/ Looks like they could get more downstream refining cash flow going soon to process more of their dilbit. That should help somewhat in addition to the sale of their Prince George 'tin can' refinery and their retail operations. https://business.financialpost.com/...tions-and-prince-george-refinery-on-the-block 

All those things combined could give the stock a kick by the end of this year. If you have held on to this stock this long, I'd probably wait awhile longer because of that.


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