# Tourmaline Oil Corp (TOU)



## Killer Z (Oct 25, 2013)

I searched the forum and could not find a thread on Tourmaline. My guess is that it does not get much attention here as most appear to be dividend driven investors and TOU does not offer a dividend. I have been a big fan of this stock for two years now, and am considering starting a position. It is currently hovering around it's 200 day MVA. Any thoughts?


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## fatcat (Nov 11, 2009)

it is mostly a natural gas company that it is very highly rated by analysts
it is supposed to be the best low-cost gas producer in canada and should thrive when gas is low priced


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## Synergy (Mar 18, 2013)

I've been watching TOU for about 1 year now and will be looking to start a position by the end of the summer or early fall. I considered Altgas but I figured they'd be affected more by a rise in interest rates and the fluctuations in Nat Gas pricing.


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## fatcat (Nov 11, 2009)

they love it on stockchase: http://www.stockchase.com/company/view/3927/0/Tourmaline-Oil-Corp/TOU-T


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## james4beach (Nov 15, 2012)

I recently bought some.

I consider it a pure gamble. As I've written elsewhere, I think to properly invest in individual stocks you have to read their financial statements. I have not. I am purely gambling on TOU and another energy stock, RMP


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## Islenska (May 4, 2011)

Don't have any currently but did well trading in the $40-$45 range

Not having a dividend seems to make it easier to dump and it can give you heartburn being on a roller coaster ride!

Highly recommended though by the oil/gas people.


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## james4beach (Nov 15, 2012)

I see not having a dividend as a positive. That means it won't automatically be dumped when interest rates rise, unlike everything else


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## Killer Z (Oct 25, 2013)

I decided to jump in this past Monday. I am fairly confident from the research I have done.


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## fatcat (Nov 11, 2009)

Killer Z said:


> I am fairly confident from the research I have done.


will you forgive me if i have that phrase put on a t-shirt ?


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## Synergy (Mar 18, 2013)

Not distributing a dividend was a positive for me as well.


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## Killer Z (Oct 25, 2013)

fatcat said:


> will you forgive me if i have that phrase put on a t-shirt ?


Hahaha, maybe I should rephrase that to: "I am as confident as I need to be to pull the trigger."


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## fatcat (Nov 11, 2009)

Killer Z said:


> Hahaha, maybe I should rephrase that to: "I am as confident as I need to be to pull the trigger."


i hope you do well, i have no gas in my energy portfolio and have looked at TOU also ... i am sticking with my big oil names for the moment though


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## Islenska (May 4, 2011)

Can't find any news for the negative stock pricing generally, Oil and Gas are in the penalty box currently but,,,,,,,,,,,,,,,,,


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## Synergy (Mar 18, 2013)

Islenska said:


> Can't find any news for the negative stock pricing generally, Oil and Gas are in the penalty box currently but,,,,,,,,,,,,,,,,,


Natural gas pricing concerns may be one factor. A good overview:
http://marketrealist.com/2014/10/investors-keep-close-eye-natural-gas-inventories/

Quite expensive on a P/E basis and currently has no dividend so it's not surprising it sold off pretty good with the latest correction in the energy sector.

I've got them on my watch list. Considering a position if it drops further - below $40. Short term we'll be somewhat at the mercy of the winter this year. However, according to management, Nat gas pricing could be quite a bit lower and they'd still be profitable.


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## james4beach (Nov 15, 2012)

I'm starting to wonder if Tourmaline might be emerging as one of the survivors. In this chart, TOU is green, XEG is black:










Bottom-fishing in a distressed sector is dangerous business, but something that is outperforming the sector ETF and which is above its 200 day moving average is worth taking a look at.

On the other hand, you can see in this chart back to 2018 that TOU has followed the sector pretty closely. It has rallied tremendously in the last few months, and what if there's a "reversion to the mean" back towards XEG performance? That would make the current price a horrible entry point.


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## P_I (Dec 2, 2011)

From my perspective Tourmaline has one of the smartest management teams in the O&G space. The founder/CEO had previously done *two *versions of this company and achieved tremendous success selling them. So when TOU came around, everybody felt comfortable making a bet on Mike Rose and his magic.

I have been a shareholder since March 2018 and although the position is currently slightly negative I still believe in the management team and the company. The fact they've been paying a dividend and increasing it regularly doesn't hurt. Tourmaline Announces Strong Third Quarter Results, ... Increases Dividend and 2021 Guidance (TOU.TO)


Tourmaline said:


> *DIVIDEND INCREASE*
> 
> Given continued growth in the Company's sustainable free cash flow, Tourmaline has elected to increase the quarterly dividend from 12 cents per share to 14 cents per share ($0.56/share per year).
> Tourmaline commenced paying a dividend in the first quarter of 2018. The current dividend increase represents the fourth time the dividend has been increased since then.


As to what price is a suitable entry point, that's up to the each investor to determine. My process looks at what I calculate as a margin of safety and I try to stay disciplined on price.


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## AltaRed (Jun 8, 2009)

Agree with respect to the skills of Mike Rose. It is one reason why TOU continues to get, more or less, media space.


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## doctrine (Sep 30, 2011)

TOU is no flash in the pan. They are low cost and low debt, and are now going to be major acquirers. Their stock is trading at 20% above peer levels, which gives them more of an ability to issue stock to acquire as well. 

Given the stock is up this much, this is one of the first times we've seen an O&G company move up after major acquisitions. And they have acquired big - 25% growth in one fell swoop. 

TOU could double from here in the next couple of years. Certainly, $30 is a reasonable target. But it is not trading at a discount - companies like Suncor and CNQ probably have more upside given they haven't moved yet.


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## james4beach (Nov 15, 2012)

doctrine said:


> Given the stock is up this much, this is one of the first times we've seen an O&G company move up after major acquisitions. And they have acquired big - 25% growth in one fell swoop.
> 
> TOU could double from here in the next couple of years. Certainly, $30 is a reasonable target. But it is not trading at a discount - companies like Suncor and CNQ probably have more upside given they haven't moved yet.


Interesting ... thanks!


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## doctrine (Sep 30, 2011)

doctrine said:


> TOU could double from here in the next couple of years. Certainly, $30 is a reasonable target. But it is not trading at a discount - companies like Suncor and CNQ probably have more upside given they haven't moved yet.


Looks like "*double from here" actually meant quadruple. I've been in TOU since Dec and up 42% + $1.45 in dividends. What interest me is they are low debt and are paying big special dividends this year - which could be as much as $5 a share. Since I was buying at $41-42, I figured it could be 12-14% yield in dividends alone, plus plenty of upside from strong natural gas prices. It could still be a 10% yield even with recent increases in the stock price, and there is still room for small acquisitions and buybacks. 

TOU also closed the week at an all time high, just above the 2014 peak. This is the 2nd major oil and gas company after CNQ to hit this milestone. They also own 37% of Topaz Energy which also hit an all time high. Maybe not a surprise that a company like TOU with such highly regarded management, perhaps even equal to CNQ, is hitting ATHs before so many others.


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## Ponderling (Mar 1, 2013)

I'm in on this one, and recently trimmed my position. 
Yes, In know that price has continued to rise.
But I also hold other oil co;s and they all had got over weight.

So I took the oil co profits and rolled them into other sub-sectors that have not roared in the recent past, and so were a bit under weight.


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## zinfit (Mar 21, 2021)

It is great company and very strong on NG. I think it very highly priced. I think Arc Resources is a better priced NG producer and has more upside short and long. They will do very well once the west coast LNG project is complete. Don't get me wrong TOU is a great company and has a great CEO. If the Russian/Ukrainian war was settled I expect a temporary hard hit to the NG stocks. That will be the time I would buy TOU.


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## doctrine (Sep 30, 2011)

TOU declared an 11% dividend increase to $1 a share annually and another $2.25 special dividend. Nearly debt free, they have paid $7.90 in dividends in total just in 2022, of which I have received all on a cost basis of $42 from 11 months ago. Not that this was a secret or I had any edge, they publicly announced in September 2021 that they estimated they would pay $7.50 in dividends in 2022, which was pretty much a 20% yield at the time. About a 105% return for me, which is above average too for my holdings. Very nice holding. Intending on keeping my shares, of course. They are still selling natural gas on average at a 30-40% discount to US pricing overall, and a 80-90% discount to world pricing. Maybe we don't see those prices in Alberta/BC, but I would like to hold until at least LNG Canada comes online in 2025 and we see how close we get. Very interesting that they have starting locking in natural gas, albeit in small quantities, at prices from $30-50/mcf, as opposed to their average current price of $5.37 mcf.


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## londoncalling (Sep 17, 2011)

Congrats @doctrine You shared your views on TOU and oil in general long ago so you are right in that it was not a secret held by either TOU or yourself. Just goes to show money can be made even during a bear market like we are having now. I am expecting the general market to continue downward for now but in a few years see big gains like those that were buying oil names a couple years ago are seeing now.


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