# Crescent Point Energy (CPG.to)



## leeder

I currently own some of this stock at book value of $44.97. Love the 23 cent monthly dividend. But with the new acquisition they made (and once again, more stock issuance), their price dropped below $40. I know it's still not the cheapest stock in the world (high P/E ratio, etc.), but I would love to get some opinion on this stock and whether I should consider buying some more now to average down (and waiting while getting paid) or to wait for the price to drop even further. One thing to note is that some analysts have raised the target price of this company. While it's not the most important fact, I find that somewhat interesting. What do you all think?


----------



## doctrine

To me, I don't like some of their corporate decisions. They issue tons of stock, and the only reason their dividend is sustainable is because so many people are in the DRIP, but this just makes it worse in the long run - sooner or later investors are going to want real returns. I would suggest it could drop more, certainly it was 10% lower as recently as July.


----------



## gibor365

Lat year I bought it at low 43's and sold middle 46's + 4 months of dividends.... yes, I made RRSP contributions, and it's on my radar together with RPL


----------



## leeder

@ doctrine: I know what you're saying. One of the reasons why I'm asking around is because of CPG's stock issuance. Just this year alone, it has issued close to $3 billion worth of equity. At the same time, I also like a lot of the acquisitions they have made and believe it may pay off in the future. While I'm waiting for this payoff, I would also be collecting a decent (and fairly stable) dividend. I dunno... I'm a bit conflicted. More likely than not, I'll hold off from doing anything until I see how the company reacts in the next few weeks. It is very tempting to buy right now just to average down my book value/share....


----------



## dubmac

doctrine said:


> To me, I don't like some of their corporate decisions. .


I'm with doctrine. They issue far too much paper, carry too much debt. PE too high. There are better ones than CPG


----------



## leeder

What is a good high yielding energy stock with capital growth potential? Of the following high yielding mid or large caps that I know of, which would you prefer: Baytex, Crescent Point, Keyera, Vermillion.


----------



## humble_pie

i'm out of touch with vermilion at present, but i've held it in the past so don't rule it out. Your quartet looks like an excellent short list, why not buy all 4 ? or at least the 1st 3.


----------



## Nemo2

We've held Vermillion since December '08.....purchased @ $22.80, currently up 105.92%, with a dividend of 10% based on cost.


----------



## dubmac

Code:







Nemo2 said:


> We've held Vermillion since December '08.....purchased @ $22.80, currently up 105.92%, with a dividend of 10% based on cost.


I hold Baytex & plan to add more over time. I'd like to buy one more, something that is not heavy oil (which is Baytex's forte) - probably Keyera. Keyera lost Peter Lougheed as a board member recently, but their leadership is strong nonetheless


----------



## GoldStone

leeder said:


> What is a good high yielding energy stock with capital growth potential? Of the following high yielding mid or large caps that I know of, which would you prefer: Baytex, Crescent Point, Keyera, Vermillion.


*Dividends/Earnings* (Sept 2012)

Baytex: 98%
Crescent: 209%
Keyera: 194%
Vermillion: 157%

With payouts like these, I don't see how you can hope for capital growth. As doctrine said, the only reason it's sustainable (for now) is because everyone DRIPs. They are constantly diluting shareholders.

You might want to read this:

How DRIP Dilution Can Hurt Your Investment Portfolio
http://www.pfhub.com/how-drip-dilution-can-hurt-your-investment-portfolio/


----------



## Nemo2

dubmac said:


> Code:
> 
> 
> 
> 
> I hold Baytex & plan to add more over time. I'd like to buy one more, something that is not heavy oil (which is Baytex's forte) - probably Keyera. Keyera lost Peter Lougheed as a board member recently, but their leadership is strong nonetheless


BTE is another one we LOVE......bought it @ $13.16, effective Feb 13/09, up 236.85% as of today.....and making 20.06% on our original purchase. :encouragement:


----------



## blin10

Baytex, Crescent, Keyera, Vermillion all good choices, question is after usa election what will happen to the market and oil prices, if market sinks all energy going down... im holding a few of them but i will not panic even if shares get cut in half i'll be buying more


----------



## blin10

nemo, I'm curious how large are your positions in ver/bte when you bought back in 08 if not a secret.. are we talking few hundred shares or few thousand ?



Nemo2 said:


> BTE is another one we LOVE......bought it @ $13.16, effective Feb 13/09, up 236.85% as of today.....and making 20.06% on our original purchase. :encouragement:


----------



## Nemo2

blin10 said:


> nemo, I'm curious how large are your positions in ver/bte when you bought back in 08 if not a secret.. are we talking few hundred shares or few thousand ?


Low hundreds, (unfortunately)........we keep saying "If only we'd bought more"......our situation, (I'm 70, my lady is 60), is that, while we are light years away from being even slightly knowledgeable about stocks, we are not at all reticent about 'stealing' ideas from people who have proven to be worth 'stealing' from, (such as Scomac, who posts here and whom we first encountered at FWF)......we buy primarily for dividends.

A portion of our capital is with PH&N and hasn't been touched in ~ 20 years.....they look after that and we monitor our segment......not very scientific/efficient but it works for us.......we live on less than the income generated, (along with CPP/OAS), therein.......our current capital losses are less than 1% of our capital gains, and should the occasion arise we take advantage of tax loss harvesting.

So...to the casual observer our holdings are a veritable mishmash, (we are definitely _not_ traders).......but we seem to get by.


----------



## gibor365

GoldStone said:


> *Dividends/Earnings* (Sept 2012)
> 
> Baytex: 98%
> Crescent: 209%
> Keyera: 194%
> Vermillion: 157%
> 
> With payouts like these, I don't see how you can hope for capital growth.


You have a point! btw, VET payout is 220% (not 157%). 
More than that only BTE has normal P/E = 17 (and good yield 6%), CPG has 30, and KEY and VET 46! I'd only consider CPG because of the highest yield in the group = 7% and many dividend investors simply like it.
KEY and VET have only 4.3% and 4.8%. Maybe I don't understand something , but why not to invest instead into (as an example):
HSE with payout 60% , P/E 13,8 and comparable yield 4.4% or COP.N with payout 47%, P/E = 10.4 and yield 4.8% (also they increase dividends for 12 consecutive years)??


----------



## leeder

humble_pie said:


> i'm out of touch with vermilion at present, but i've held it in the past so don't rule it out. Your quartet looks like an excellent short list, why not buy all 4 ? or at least the 1st 3.


I actually own Baytex and Crescent Point (among 2 other energy stocks -- Altagas and Canadian Natural Resource). Baytex has somewhat disappointed me this year due to the WTI differentials. The reason why I don't buy all four is that I want to stick to my own planned asset allocation. That said, Keyera really interested me couple months ago when it was below $40, but I didn't buy any at the time because I was very overweight energy earlier this year.



gibor said:


> You have a point! btw, VET payout is 220% (not 157%).
> More than that only BTE has normal P/E = 17 (and good yield 6%), CPG has 30, and KEY and VET 46! I'd only consider CPG because of the highest yield in the group = 7% and many dividend investors simply like it.
> KEY and VET have only 4.3% and 4.8%. Maybe I don't understand something , but why not to invest instead into (as an example):
> HSE with payout 60% , P/E 13,8 and comparable yield 4.4% or COP.N with payout 47%, P/E = 10.4 and yield 4.8% (also they increase dividends for 12 consecutive years)??


Not a big fan of HSE for me. If anything, I'd go for Suncor or Cenovus....


----------



## gibor365

Suncor or Cenovus or CNQ in a different category... and I just wanted to understand why you considered KEY and not HSE?


----------



## doctrine

HSE is my preferred oil company. They have a decent dividend, which hits 5% whenever the stock drops below $24, and they are shielded from low oil prices by their refining. For example, this last quarter, their realized price of oil dropped from $78 to $70 a year ago. However, their profits were maintained because they sell as much or more refined product and those prices have been maintaining. 

Suncor is a close second, but their dividend payout is not as high.


----------



## GoldStone

gibor said:


> You have a point! btw, VET payout is 220% (not 157%).


I cited payout numbers from an article in the latest issue of MoneySense magazine. The article used Bloomberg data.

Payout numbers are tricky. They can be based on trailing earnings or forward earnings; total earnings or earnings from continuous operations (excluding unusual items), and so on.

But that's really beyond the point. 157% or 220%, doesn't look sustainable either way. The only reasons it works is because everyone DRIPs. Whenever I see payouts like these, I think of a Ponzi scheme. Maybe I'm missing something. I hope someone can enlighten me.



gibor said:


> More than that only BTE has normal P/E = 17 (and good yield 6%), CPG has 30, and KEY and VET 46!


Again, you have to qualify the E part in P/E. CPG P/E of 30 is based on trailing earnings. Forward P/E is close to 60. :eek2:



gibor said:


> Maybe I don't understand something , but why not to invest instead into (as an example):
> HSE with payout 60% , P/E 13,8 and comparable yield 4.4% or COP.N with payout 47%, P/E = 10.4 and yield 4.8% (also they increase dividends for 12 consecutive years)??


+1. I own HSE. Their valuations make sense.

OTOH, take a look at 5 year total returns:

BTE: +258%
CPG: +214%
KEY: +260%
VET: +60%
HSE: -17%

If you invest based on past returns, you pick the first 4. If you invest based on current valuations, you pick HSE.

Again, I wonder if I'm missing something. Can someone explain why insane payouts don't matter?


----------



## Eder

I own Keyera...I don't think they are comparable to those other companies. (pipelines,gas plants, etc.)


----------



## leeder

gibor said:


> Suncor or Cenovus or CNQ in a different category... and I just wanted to understand why you considered KEY and not HSE?


Hey gibor, the reason why I lump Husky with Suncor, Cenovus (and would lump CNQ) is because it is an integrated oil and gas company. My understanding of Keyera is that it is more of a natural gas processing company and has no oil component. Imo, Altagas is a better comparable (though ALA has more utility components). Don't get me wrong -- HSE has good valuations and pays a good dividend, but I would prefer suncor just because it's bigger and they are likely to increase dividends, among the integrated oil group


----------



## gibor365

SU (as well as CNQ) large cap low yield stocks with high dividend growth, HSE (as well as CPG, BTE) - middle cap high yield stock with low dividend growth...I personally hold SU, CNQ and HSE. COP is the best of both world, large cap, high yield and high growth.


----------



## leeder

gibor said:


> SU (as well as CNQ) large cap low yield stocks with high dividend growth, HSE (as well as CPG, BTE) - middle cap high yield stock with low dividend growth...I personally hold SU, CNQ and HSE. COP is the best of both world, large cap, high yield and high growth.


Not sure I would characterize HSE as mid-cap. Their market cap is close to CNQ and slightly over CVE. If given a choice between HSE and CVE, i think I prefer the latter...but that's just me. I appreciate your view though. I agree on COP. Love the fact that they split their business now. However, I am not looking to invest in individual foreign stocks. I play my foreign equities through investing in VTI and VXUS in my registered accounts. I like to invest in individual Canadian stocks, particularly in my non-registered account b/c I can pick up higher dividends and manipulate the overall sector/industry % weight. Anyway, I digress...


----------



## bettyboop

I'm back in CPG at 38.02, I bought a half position, if it drops to 34 or 36 I'll buy more.


----------



## PMREdmonton

Named as a top pick by Eric Nutall today on BNN.

His other choices were Spartan Oil and Renegade Petroleum.


----------



## bettyboop

PMREdmonton said:


> Named as a top pick by Eric Nutall today on BNN.
> 
> His other choices were Spartan Oil and Renegade Petroleum.




I'll go listen now, I have a little RPL too, thx


----------



## zylon

> Money is Moving: Nov19-21 Crescent Point Director P. Colborne buys 42.5k shares


http://www.canadianinsider.com/node/7?ticker=CPG

- via Twitter @Canadianinsider

http://www.canadianinsider.com/node/3









Crescent Point a big believer in shipping oil by rail 
http://m.theglobeandmail.com/report...ng-oil-by-rail/article4471845/?service=mobile


----------



## humble_pie

zylon did you ever look at that paul colborne's trading history in cpg or just about anything he owns ?

he's hypermanic. Often buys & sells several times a week. He's the only insider i've ever heard of whose history shows he'll load up an inside stock at, say, 11.72 & then a couple days later he'll up & sell all at 11.19. Go figure.

colborne is reportedly an ageing but cagey alberta oil tycoon who was chair of tristar when it merged to become petrobakken. I can't fathom his cuckoo insider trading so i don't even bother to think about it.

i still think crescent point is where it was last week, last month & last year. A decent company with good properties, smart management, a high dividend & a lot of nay-sayers who might be shorts all shrieking Ponzi ! Ponzi ! Ponzi !


----------



## zylon

Ah yes, *h_p*, Colborne is quite the busy guy; I wonder if he has someone else doing the trades for him? Such as a churn-happy broker with a short career?

I guess "ageing" is a matter of perspective; I thought he was in mid 50s; perhaps thinking of someone else.

_______________
Revolutions end right back at the beginning;
that's what revolutions do.
~Joel Bowman


----------



## londoncalling

To put it in another perspective:

We all age the same amount each day. However some of us do it much more gracefully than others... ;P


----------



## webber22

CPG came out with a new capital spending program today.
Stock came down to $36.34 today, I'll have to buy more to average down on this one. It was a much tamer stock before it was added to the wolves of the TSX60


----------



## leeder

I personally am comfortable adding to my position here. I like how they are coming out and saying they will focus on organic growth, integration of the assets acquired this year, and raising production. If they hold true to their words, I can see this stock bouncing back up next year.


----------



## OurBigFatWallet

*Crescent Point Energy (CPG)*

Anyone have any thoughts on this company? I own and I've held for a while but always curious to hear other opinions. Their payout ratio is high but they have committed to paying the div long term. I can see potential in the long term as long as commodity prices don't take a dive


----------



## londoncalling

I think this is what you are looking for...

http://canadianmoneyforum.com/showt...oint-Energy-(CPG-to)?highlight=crescent+point


----------



## My Own Advisor

Will continue to hold. 

Total equity on the rise over last 5 years (in millions):

Total Equity	8,653	5,857	5,492	3,978	1,845
Total Liabilities & Shareholder's Equity	12,132	8,734	7,944	5,439	3,308

I don't see this company going anywhere but with any stocks, never say never. 7% yield now, getting too high.


----------



## AltaRed

Those numbers don't tell the real story since they are due to the acquisition spree and issuance of new shares. What matters more is if those acquisitions were accretive. Better to look at P/E, P/CF, ROE, Earnings/share and CF/share metrics to see where this company is going.


----------



## maxandrelax

One of my oldest holdings. Been underwater since I bought it. Dripping and dripping.


----------



## Jon_Snow

Bought a **** ton of this when it dipped down to around $35. This could stay around $40 forever and it wouldn't bother me one bit. As long as I can keep collecting my 7.4% dividend.... $550 in my jeans monthly. 

From everything I have read, this is about as safe a high dividend energy stock to be found in Canada. I've seen a few analysts say this is going to $48 in 2014 - I won't be greedy but I'll take it if it happens. :tongue-new:


----------



## leeder

I've continued to hold it. Stock price is still lower than my ACB, but the company is paying me to wait. Last year, the company has not issued any equity. They focused on organic growth. CPG has performed above expectations in regards to their production all of last year; however, the stock price hasn't moved up too much. I fully expect this company to continue to do well with their operations. I also hope that we get positive news on some of those pipeline expansion, which will help this and other energy companies. Otherwise, I expect this stock to trade between $36 to $45 this year.


----------



## OurBigFatWallet

Jon_Snow said:


> Bought a **** ton of this when it dipped down to around $35. This could stay around $40 forever and it wouldn't bother me one bit. As long as I can keep collecting my 7.4% dividend.... $550 in my jeans monthly.
> 
> From everything I have read, this is about as safe a high dividend energy stock to be found in Canada. I've seen a few analysts say this is going to $48 in 2014 - I won't be greedy but I'll take it if it happens. :tongue-new:


$550 per month is pretty awesome. I'm in the same boat, I own and have no plans to sell. I did sell a little when it was around $42 but haven't sold any since. I've read a lot about it and everyone seems to think the div is safe. Can't complain about 7%


----------



## Synergy

^ holding and liking the dividend. Payout ratio is suppose to continue to fall.


----------



## gibor365

Jon_Snow said:


> Bought a **** ton of this when it dipped down to around $35. This could stay around $40 forever and it wouldn't bother me one bit. As long as I can keep collecting my 7.4% dividend.... $550 in my jeans monthly.


Don't you DRIP? You get 5% discount on DRIPs


----------



## fatcat

HTML:




i have had this for quite a while and watched it go sideways but plan to hold, it seems to leapfrog with my husky and suncor, i recently added cenovus also
here is what the last 3 comments at stockchase were about CPG (which appears regularly in the "top picks" section from guest globe analysts)



> A core holding for him. A grandfather of growth / dividend model, oil weighted. About 7% yield. Posed for a much better 2014, transitioning from an acquisition to organic growth model and not continuing to issue equity.





> This is one of the stocks that a lot of people might buy just for the income side of it. Has a fantastic dividend of about 7%. Because it has a fairly sideways, although volatile, pattern you could buy it if you just want to make your 7%. It is probably not going to go crashing down. Seems to be range bound. Seasonably, February to May is a good time to own oils.





> Emerging as one of the great Midcap producers in Canada. The estimated exit rate is about 137,000 barrels a day. Focused on acquiring lands and companies for prospective resources and developing them in a primary and secondary method. He is looking for a 26% gain including the 7% dividend.


----------



## humble_pie

it's possible to eke out a higher current yield from cpg via the judicious sale of options, with one caveat. To date, there has only been a toronto listing for crescent point, therefore options have only traded on the montreal exchange.

historically the montreal cpg option specialists have been tight-fisted to a tee. Quite often it's near-impossible to pry even the traditional nickel out of em.

however, cpg has recently listed in new york so one might expect that a US options market will develop. This could be highly auspicious. I'm looking forward to it.


----------



## OurBigFatWallet

Any bets on if they'll increase the dividend within the next year or two? I'm betting they'll wait until the payout ratio is lower but it would be nice to see a small increase


----------



## humble_pie

cpg has never increased the dividend. I'm betting they won't.


----------



## gibor365

humble_pie said:


> cpg has never increased the dividend. I'm betting they won't.


At least they didn't cut it during last recession


----------



## Killer Z

Can they will maintain their dividend? I know they've been paying $0.23 since 2009, but seems rather unlikely with a payout ratio of 480% .......

P.S. Why isn't this thread in the Individual Stock forum?


----------



## leeder

@ Killer Z: This article may shed some light. Rather than dividing by earnings, they are dividing by operating cash flow per share.

One concern I have with CPG is the fact that, even with production growth and attractive assets they acquired in 2012, their share price traded in a range. Their earnings per share in the past couple years have been all over the map. To me, this company is sort of tough to analyze.


----------



## humble_pie

i'm surprised the extreme bears don't surface here to say - as they've been saying for years & years - that crescent point is nothing but a giant ponzi scheme with large-scale treasury share dripping plus the historic small bonus that, until recently, came with it.

cpg does trade in a range. This is why the option premiums are relatively flat. It does pay its dividends from cash flow. Company has a very long history of hedging oil production which makes the dividend more secure.

share price of cpg didn't even flutter when it commenced trading on the nyse couple weeks ago. US trading volume remains low.

if the above appear to add up to a disrecommendation, nothing could be further from the truth. CPG is my largest holding. It's possible, with the dividend plus option combo, to extract a current return of close to 10%. Company has excellent & stable management, a giant farm of high-quality properties across manitoba, saskatchewan, alberta & north dakota, a proven cluster of technologies, a low debt-to-cash-flow compared to its peers. Crescent point is a 100% transparent north american operation extracting premium grade light sweet bakken crude with zero foreign geopolitical risk.

with an income return bordering on 10%, all as tax-favoured dividends & capital gain, investors might not want to get so carried away by greed as to demand rapid growth in addition. It's possible to add to holdings when share price cycles down into the 35-38 range. Yesterday i bought 200 more shares in tfsa.


----------



## Killer Z

leeder said:


> @ Killer Z: This article may shed some light. Rather than dividing by earnings, they are dividing by operating cash flow per share.
> 
> One concern I have with CPG is the fact that, even with production growth and attractive assets they acquired in 2012, their share price traded in a range. Their earnings per share in the past couple years have been all over the map. To me, this company is sort of tough to analyze.


Good article, thanks leeder.



humble_pie said:


> i'm surprised the extreme bears don't surface here to say - as they've been saying for years & years - that crescent point is nothing but a giant ponzi scheme with large-scale treasury share dripping plus the historic small bonus that, until recently, came with it.
> 
> cpg does trade in a range. This is why the option premiums are relatively flat. It does pay its dividends from cash flow. Company has a very long history of hedging oil production which makes the dividend more secure.
> 
> share price of cpg didn't even flutter when it commenced trading on the nyse couple weeks ago. US trading volume remains low.
> 
> if the above appear to add up to a disrecommendation, nothing could be further from the truth. CPG is my largest holding. It's possible, with the dividend plus option combo, to extract a current return of close to 10%. Company has excellent & stable management, a giant farm of high-quality properties across manitoba, saskatchewan, alberta & north dakota, a proven cluster of technologies, a low debt-to-cash-flow compared to its peers. Crescent point is a 100% transparent north american operation extracting premium grade light sweet bakken crude with zero foreign geopolitical risk.
> 
> with an income return bordering on 10%, all as tax-favoured dividends & capital gain, investors might not want to get so carried away by greed as to demand rapid growth in addition. It's possible to add to holdings when share price cycles down into the 35-38 range. Yesterday i bought 200 more shares in tfsa.


Interesting thoughts, much obliged hp.


----------



## OurBigFatWallet

It seems to trade in a range of 35-40 and nothing beyond that (for the most part). Can't complain about the dividend though, 7% is great and looks to continue into the future


----------



## My Own Advisor

Agreed. Hopefully it goes lower, closer to $35 for a buy.


----------



## Jon_Snow

My average cost for my 2500 shares is around $36. Very happy with that. If it goes lower, I'd be tempted... love this stock. But talk about tossing diversification out the window. I should probably just walk away. 

Baytex perhaps?


----------



## Synergy

Jon_Snow said:


> My average cost for my 2500 shares is around $36. Very happy with that. If it goes lower, I'd be tempted... love this stock. But talk about tossing diversification out the window. I should probably just walk away.
> 
> Baytex perhaps?


I like Baytex. I own both CPG & BTE - hoping to see a little better growth from both companies going forward. We need some more pipes


----------



## humble_pie

some people on here were recently asking the whereabouts of forensic CA Mark Rosen, who now runs a toronto-based financial advisory service called Accountability Research corporation.

a while back Rosen published a list of canadian dividends that he believed to be at risk. CPG was not on that list. Oddly enough, BCE was. In bell's case, as with some other companies, Rosen said he was worried about undisclosed pension obligations not shown on balance sheets. I think i might have mentioned all this before? if so, sorry!

it's rare to find a quality payor of dividends yielding north of 7% in canada. People are quite right to be concerned about CPG's dividend sustainability. But so far, so good.


----------



## OurBigFatWallet

humble_pie said:


> some people on here were recently asking the whereabouts of forensic CA Mark Rosen, who now runs a toronto-based financial advisory service called Accountability Research corporation.
> 
> a while back Rosen published a list of canadian dividends that he believed to be at risk. CPG was not on that list. Oddly enough, BCE was. In bell's case, as with some other companies, Rosen said he was worried about undisclosed pension obligations not shown on balance sheets. I think i might have mentioned all this before? if so, sorry!
> 
> it's rare to find a quality payor of dividends yielding north of 7% in canada. People are quite right to be concerned about CPG's dividend sustainability. But so far, so good.


I've researched quite a bit on CPG and can't find anyone who has anything negative to say. The analysts love it (for good reason) and all say the dividend is sustainable despite the high payout ratio


----------



## Jon_Snow

Hmm... CPG and BCE are pillars of my passive income stream - that bit about BCE has my attention.


----------



## doctrine

I think BCE's dividend is solid, but there has not been a lot of earnings growth this past year to support large dividend increases. I don't think there will be much dividend growth.

On CPG, the dividend is safe if for no reason other than they've issued so much equity over the years that they actually don't have much debt and are fairly unleveraged, so they can afford to pay it for quite a while as they make operations more profitable.


----------



## AltaRed

doctrine said:


> On CPG, the dividend is safe if for no reason other than they've issued so much equity over the years that they actually don't have much debt and are fairly unleveraged, so they can afford to pay it for quite a while as they make operations more profitable.


Yeah, but it is a lot more expensive for a company to pay out a 7% after tax dividend on a ton of equity than circa 5% tax deductible interest on debt. That cannot continue long term in a capital intensive industry. I'd like to know how they plan to grow themselves out of that problem without cutting the dividend.


----------



## GoldStone

CPG recycle ratio numbers:

2012: 1.11
2011: 2.73
2010: 0.91
2009: 0.86
2008: 4.17

I don't have 2013 number but it's better be up. Anything below 2 is not good.

Recycle ratio explained:



> The recycle ratio is another important measure of profitability. It equals the profit per barrel divided by the total cost of discovering and developing that barrel. Basically, it measures the efficiency of an energy company’s capital expenditure program. Oil and gas companies deplete their main asset, the reserves, and have to replace them, or eventually go out of business. If you spend $20 to get a barrel out of the ground, and get $40 in profit for the barrel after all costs, then you are recycling your money two to one. We are looking for a high number; a minimum of 2.0 (that is, a ratio of two to one) is acceptable.


Source: G&M


----------



## humble_pie

someone may have recently tried to baptize this the "recycle ratio" but it's been around since the early days of all the old unit trusts, including the REITs. It certainly has been frequently applied to energy unit trusts, which CPG & many others once were.

saying that a resource extractor is going to run out of steam unless it finds other resources to exploit is nothing new. Mines, oil wells & commercial buildings do diminish/depreciate over time, everyone understands that.

wondering who published those numbers in the globe? to save on costs - like every other newspaper in survival crisis mode - the globe buys individual articles from free-lancers who, alas, often seem to have private agendas to advance. So one would want to know who this globe writer is & where he is coming from, in order to form an opinion as to whether his numbers have merit or not.


----------



## GoldStone

humble_pie said:


> wondering who published those numbers in the globe?


G&M Number Cruncher column Sep 9th. It's not about CPG specifically. They ran a screen of Canada Oil and Gas companies. They screened the companies for two metrics of profitability:

Production growth per share
Recycle Ratio

They published the entire screen, 21 companies in total. CPG recycle ratio is in the middle of the pack.

Average 2012 recycle ratio: 2.25
Median 2012 recycle ratio: 1.53

CPG 2012 ratio is below average and below median.

Again, the article didn't single out CPG.


----------



## humble_pie

but - as i inquired - who are "they?"

regardless of who generated the globe's numbers grid, the exhaustion of non-sustainable resources has been a known issue for millennia. I don't see it as any kind of new or novel issue. Concerned parties can simply invest elsewhere.

much more interesting is altaRed's query re how they going to keep paying that dividend when interest rates stand still at 5% or less. I suppose one solution could be the prescription version one sometimes sees for all high dividend payors now. This prescription version seeks to redress the unusual current imbalance between dividend yields - too high - & interest rates - too low. This prescription for a cure says historic norms will eventually prevail, so if interest rates don't rise, then share prices of high dividend payors could rise instead.

in fact there's an entire school of dividend devout in this forum ...


----------



## AltaRed

humble_pie said:


> This prescription for a cure says historic norms will eventually prevail, so if interest rates don't rise, then share prices of high dividend payors could rise instead.


Or if the recycle ratio is too low, or ROCE* is too low (a longer term capital efficiency ratio than recycle ratio), not enough can be re-invested in the business to increase the critical CF/S and EPS to provide a stock price lift. Then a dividend cut (or putting themselves up for sale) is the primary way out. 

@ GoldStone - I don't suppose you have a link to that Sept 9th column (or a cut and paste) for those of us who are not Globe subscribers. That might make a nice entry for a new thread on debating these companies.

* Return On Capital Employed


----------



## humble_pie

here's the link, it was 4 september, not 9 september. One has to click on "view full table."

http://www.theglobeandmail.com/glob...ling-for-sustainable-profits/article14116846/

as i rather thought, it's a vanity piece. Author is one Michael Bowman, a portfolio manager at wickham investment counsel in hamilton. One would assume his purpose in publishing research from his firm is to enhance his brand & attract new clients via this well-known globe & mail public relations route.

bowman doesn't give the source for the figures that led to the recycle ratio. Whoever crunched those numbers, it was one heck of a job. Downloading data from each individual firm's financial reports would have had to be a manual job. This brings me immediately to the mind slant of the individual researcher. One can, they say, find data to prove just about anything.

as an example, the recycle ratio points to Penn West Petroleum as the clear winner among canadian energies!

i'm always extremely happy to read reports like this as unique, individuated points of view. Points of view that could contain biases & errors. Points of view that haven't been held up for peer review.

but also as a reader who's interested in all legitimate points of view, may i say i'm far more taken with altaRed's more insightful views, including interpretation of ROCE, than i could ever be by this artificial-looking recycle ratio table.

maybe mister bowman will catch on? the smart money has already escaped into the blogosphere.


----------



## GoldStone

Feel free to attack the messenger and ignore the hard numbers. Whatever floats your boat. 

To me, it doesn't matter one bit who ran the screen. The numbers come out of a database.

They did cite the source of the numbers. It's right there under the table. Source: Bloomberg, Wickham Investment Counsel Inc.

In any case, the screen is just the starting point for further research.


----------



## humble_pie

yes i saw the source, it's exactly as you say. The recycle ratio numbers came from wickham investment counsel. The RR figs are their very own data base, nothing more. Bloomberg provided the general figs.

RR tables look nice, but the idea is certainly not new, as was mentioned upthread.

research like this probably does impress the clients, though. I mean, it's what they're paying their 1.50% of AUM for, no?


----------



## Zoombie

With the recycle ratio, one has to be a little cautious that investments in long term projects (with multi-year development/ramp-up windows) will depress the recycle ratio in that year and inflate it when production comes on line at a lagged date. (If I am reading the ratio correctly as: current profit per barrel over cost of finding tomorrows barrel). 
A useful indicator none the less and not one I would disregard because an analyst pulled it from Bloomberg....


----------



## GoldStone

humble_pie said:


> research like this probably does impress the clients, though. I mean, it's what they're paying their 1.50% of AUM for, no?


It's not a research piece. It's a simple screen. An analyst can throw it together in 10 minutes. G&M needs to fill the pages. Mr. Bowman is happy to oblige to see his name in the paper. I don't care what his motivation is or what his clients think. It's irrelevant.

The topic at hand is CPG. Low recycle ratio in 3 years out of 5 is a yellow flag. Not a red flag. I'm curious to see if they improved the ratio in 2013.


----------



## humble_pie

Zoombie said:


> the recycle ratio ... not one I would disregard because an analyst pulled it from Bloomberg....



i disagree that any analyst ever "pulled" the recycle ratio table from bloomberg.

look closely at the article. There's a broad acknowledgement of bloomberg plus wickham investment counsel as the source for all data that appears in the 3-page article, which includes several tables.

now look closely at the RR table. It's one part of the article. There's no specific acknowledgement attached to it whatsoever.

my money says that the RR columns in the table - for the years 2008-2012 - are 100% proprietary wickham in origin.


----------



## Zoombie

You may well be right humble_pie, too lazy myself to 'pull from Bloomberg' the numbers to see if they verify without adjustment. 
CPG had a good day regardless


----------



## Synergy

Zoombie said:


> CPG had a good day regardless


CPG got a bump along with the overall energy market 

Interesting metric discussed above. I'm going to have to compare a few of my energy holdings to see how they match up.


----------



## OurBigFatWallet

Anyone who is interested with CPG should also look at Surge Energy. It went up quite a bit when it was announced that Colborne was coming on board. Dividends seem to be their focus with a couple increases in months (I own some shares)


----------



## OurBigFatWallet

Big increase for CPG today due to some solid results coming out. Hoping it can stay above $40


----------



## Jon_Snow

Love CPG... and why not, when it pays me 7k per year in divys. :encouragement:


----------



## JordoR

Jon_Snow said:


> Love CPG... and why not, when it pays me 7k per year in divys. :encouragement:


Wow 6 figure position in CPG... wish I had that much 

Yes I also enjoyed the nice jump today.


----------



## OurBigFatWallet

Jon_Snow said:


> Love CPG... and why not, when it pays me 7k per year in divys. :encouragement:


@Jon Snow what is your strategy with CPG? Buy and hold or do you trade it?


----------



## My Own Advisor

$7k per year in divis....from one stock... geez.... ))


----------



## Jon_Snow

OurBigFatWallet said:


> @Jon Snow what is your strategy with CPG? Buy and hold or do you trade it?


I intend to hold this for a long time and collect the dividends. If it comes back down to $35 (where I initiated my position) one day, I might even buy more. Love the company, fits my investor profile perfectly.


----------



## Jon_Snow

My Own Advisor said:


> $7k per year in divis....from one stock... geez.... ))


Go big or go home. :biggrin:


----------



## PatInTheHat

I'm considering selling and waiting for a breakout above it's trading range. Despite a good oil price, strong results, constant analyst upgrades, bbn hammering the heck out of it with top picks it still can't seem to get anywhere.

7% is OK but i'm looking for much larger gains, especially in todays market.

The only thing holding me back is my recent sales of IPL/PPL/CNQ/PKI have all lead to further 10-15% gains in those stocks... Basically what i'm saying who wants to pay me to sell?


----------



## liquidfinance

I am tempted to start a position in this one. Just not sure how sustainable that yield is.


----------



## yyz

been 0.23 per month since 2008 seems pretty stable to me


----------



## gardner

yyz said:


> pretty stable


All I know is what google finance has, but the reported P/E is almost 280 and their dividend payout ratio is nearly 2,000%.
This does not strike me as being poised for future stable performance.


----------



## yyz

So don't buy it doesn't bother me.
If you look at yahoo or gogle or reuters they all have different p/e earnings so who's right?


----------



## liquidfinance

The Google finance figures are really not giving the true story. 

I know they have previously issued a lot of equity to raise funds for expansion. I know they are fairly low debt. On a free cash flow basis there is plenty available to pay the divi. 

I'm more concerned about it going forwards. Will they continue to issue new equity?


----------



## AltaRed

liquidfinance said:


> I'm more concerned about it going forwards. Will they continue to issue new equity?


That is a sure way to put a ceiling on stock price. Given past history and 3-5 year price charts, I'd suggest an entry point closer to $38 is a better bet than at $40+. I seem to recall someone saying this is a trading stock (buy at $38, sell at $40).

Added: It should eventually break out of this range, but when?


----------



## PatInTheHat

AltaRed said:


> That is a sure way to put a ceiling on stock price. Given past history and 3-5 year price charts, I'd suggest an entry point closer to $38 is a better bet than at $40+. I seem to recall someone saying this is a trading stock (buy at $38, sell at $40).
> 
> Added: It should eventually break out of this range, but when?


I'm very close to selling my position. So soon.

I would also wait to initiate a position at $38, or if it breaks above $42. (Unless you just want to collect the divy)


----------



## humble_pie

dividend plus call option sales = current return of 9-10%, from a decent company.

return would be even higher if investor were to sell puts as well. Here he'd be pushing 11%. From a decent company.

i'm not looking for big share appreciation, the days when cpg climbed from $22 to $40 are long gone.

company recently said they're done financing for a while. I wouldn't bet the farm. I think management is acquisition-oriented.


----------



## liquidfinance

I decided to start a small position. Be prepared to by on the dip now


----------



## PatInTheHat

Sold at $40.40.. have at it guys!


----------



## yyz

Thanks for selling Pat the stock is having a nice little run.I guess you were the problem


----------



## gibor365

yyz said:


> Thanks for selling Pat the stock is having a nice little run.I guess you were the problem


 I bought CPG several months ago at $38.36.... holding and no intention to sell , hold it in TFSA and have couple of grands in ATL5000 as planning to add CPG on dips below 40


----------



## yyz

I'm hoping it is breaking out like Baxter Energy seems to have done.I hope you don't get a chance to add under $40 but I too have traded this stock before and probably will again.


----------



## Jon_Snow

To say that this stock makes me happy would be a huge understatement.


----------



## maxandrelax

Jon_Snow said:


> To say that this stock makes me happy would be a huge understatement.


Depends when you buy it... I bought it a few years ago at $46. Been happily dripin'


----------



## Jon_Snow

maxandrelax said:


> Depends when you buy it... I bought it a few years ago at $46. Been happily dripin'


Bought 2500 shares at $36.:biggrin:


----------



## Kaitlyn

Jon_Snow said:


> Bought 2500 shares at $36.:biggrin:


I wish I could throw 90k at a single stock... or my entire portfolio of stock...


----------



## maxandrelax

Jon_Snow said:


> Bought 2500 shares at $36.:biggrin:


Yes yes we know...


----------



## maxandrelax

Kaitlyn said:


> I wish I could throw 90k at a single stock... or my entire portfolio of stock...


No worries Kaitlyn, over time you will be surprised how it grows. I'm heavily diversified. No holdings over 10g and am happy with that. The drip'ing shares of CPG have been great at the lower price. 

JS has good game going big on a company that isn't going anywhere, getting paid to wait. It's a beautiful thing.


----------



## OurBigFatWallet

Jon_Snow said:


> Bought 2500 shares at $36.:biggrin:


Wow. That's a good position to be in. TFSA, RRSP or non registered account?


----------



## yyz

And a nice move so far today on a discovery 

http://crescentpointenergy.mwnewsroom.com/Files/7f/7f7a3ad3-dec6-40c7-9cfb-13f0f1808ded.pdf


----------



## JordoR

I'm certainly happy with the performance of CPG. I purchased it based on my own assumption that the share price would stay flat, but I would enjoy the high yield - but I've also enjoyed a 10% increase excluding yield in a pretty short time period.


----------



## leeder

I bought it two years ago and have a cost base of $42.22. It's finally broken past that mark. I'm glad I had the patience with this stock.


----------



## My Own Advisor

I wish it was cheaper


----------



## Jon_Snow

This is getting.... amazing. :eek2:


----------



## PatInTheHat

Now do I dare ruin this breakout by coming back in? 

I would be very surprised if it didn't run to at least $46


----------



## My Own Advisor

Same. If I had money back in the summer and fall of 2013, I would have purchased more. Oh well. Can't make it rain


----------



## Jon_Snow

PatInTheHat said:


> Now do I dare ruin this breakout by coming back in?
> 
> I would be very surprised if it didn't run to at least $46


Pat, if you are coming back in, I should probably sell. :biggrin: I kid of course.

If the stock price spike hasn't been good enough for my portfolio, I received my $550 dividend today. Very good times for my portfolio, especially my non-registered assets.

Actually starting to get nervous. :hopelessness:


----------



## OurBigFatWallet

I sold some at $44 earlier today but still own and will continue to hold. If/when it goes down to $36 again I will buy more


----------



## Jon_Snow

I bought CPG for its ability to provide a predictable stream of income. Never had any intentions of trading this. But if it gets to $46 I may very well have to reap some capital gains here. But then again, the shares I bought at $36 are paying around 7.4% - I would hate to lose that.

Truly a first world conundrum.


----------



## JordoR

I'm in a bit of the same boat Jon, I also bought solely for the dividends but am tempted to sell at 45.5-46 (if it reachest that) and hold the cash till it becomes lower. But depending on how long that might take I would be missing out on some nice div's. Such hard decisions when something is performing well


----------



## Synergy

^ Then you'd kick yourself for selling if it continues to go up and eventually trades in a new range - lets say from $46-58! I've been tempted to do the same (trade the range by selling 1/2 position or so) for a few of my holdings - CPG, COS, etc. but at this point I think I'll simply ride the wave and buy more should the prices come down again. If I held these stocks in a registered account and held a significant position I'd be more inclined to attempt a trade or two - but then it's still somewhat of a coin toss IMO. There's no guarantee that history will repeat itself ;o)


----------



## PatInTheHat

I do think things have changed for CPG and there is more good news on the horizon. On the flip side it is extremely overbought and seasonality is coming to an end. Tough call.


----------



## CPA Candidate

I bought some CPG last July at 35.84. I fully expect the stock to come down from here. Remember it opened the year above $41 before going down below $38 in Feb. There's a fairly predictable pattern with this stock. They pay out so much cash that capital gains are hard to come by. That's their model.


----------



## maxandrelax

Somebody went shopping! I know nothing about this company they bought, so can't contribute anything of value.


----------



## Jon_Snow

I had a moment of panic when my CPG holding was showing $0.00 in my brokerage account. :tongue-new:


----------



## OurBigFatWallet

Another acquisition today. CPG acquired CanEra for $1.1B. 97% light oil in a highly coveted area in SE Sask where CPG already has operations. 97% light oil. In other words: quality assets in a great area where CPG already has operations (economies of scale)


----------



## AltaRed

This company just cannot seem to stop diluting its shares with its unrepenting appetite for acquisitions. It regularly tends to put caps on its share price. Note how it has terrible financial metrics on anything to do with earnings numbers. That is a sign of large UOP (unit of production) burdens on its earnings. That comes home to roost eventually (waste of shareholder capital).

"Crescent Point, which considers the Bakken and Shaunavon plays of Saskatchewan its core holdings, said it will pay $192 million in cash, issue 12.9 million new shares and assume $348 million in debt to buy CanEra, a Calgary-based private company".


----------



## Synergy

CPG is back at their old tricks again! It will be interesting to see how investors react to their new acquisition, share diluation, etc.


----------



## Jon_Snow

I think I read it boils down to 3% share dilution and an 8% increase in production.

That seems like good math to me.


----------



## Synergy

Long term I'd have to agree, I'm just curious to see if there's any sort of knee jerk reaction either positive or negative over the next few trading sessions.


----------



## Jacq

One thing to consider is that the land (and underlying resources) in these key areas really is finite, not infinite. The only way for these guys to get increased production is to buy it. Thus, I don't feel that acquisitions are such a bad thing since the only way the bigger players can grow is to buy their growth. It's time well spent to download a resources map and figure this stuff out.


----------



## humble_pie

i'm an original CPG believer, since the early days of the unit trust. Over less than 5 years, share price has doubled. There are also high-yielding dividends & a reasonably decent if lukewarm options market in which one can sell options to boost current yield even higher.

altogether a stellar performer. It's rare in canada to find capital growth plus high dividends, but cpg delivers both. The recent listing in new york was the gateway IMHO to a new permanent higher trading range, something like CAD 42-50.

i'm also hoping that a liquid US options market develops for this underlying. Montreal options in cpg are moribund, that dealer/specialist in montreal cpg options deserves to be left in the dust.

long before crescent point traded publicly, the scott saxburg venture in the bakken was financed by 3 US hedge funds who believed in saxburg's then-controversial ideas about horizontal drilling in the deep formation. The 3 hedge funds sold as the company morphed into a successful publicly-traded entity. Now with the new US listing, it looks like big american financiers have returned to crescent point. 

i first stumbled upon CPG years ago when i read a tiny newspaper filler item about how the town of Weyburn saskatchewan was the leading city in canada with the greatest increase in housing prices year-over-year. So i googled to see what was going on in beautiful downtown weyburn SK. It was the nearest town to a company that had begun drilling for light sweet crude with a new technology that could make previously-inaccessible deep wells operational, i read.

to think we've had posters here in cmf forum over the years who've scoffed at this stock!


----------



## leeder

BNN reported there are rumours that CPG would acquire Torc Oil & Gas. This acquisition of CanEra may be the start of multiple acquisitions, similar to 2012.


----------



## My Own Advisor

Hard to ignore the dividends...and if they have cash on top of that to make acquisitions....this bodes well.


----------



## Jon_Snow

Bought some more (500 shares) during this mornings swoon - if all these analysts are right and CPG gets past $50... well, I'll be happy I suppose. Going to hold for the long term now.


----------



## Synergy

^ good buy. I figured there might be an initial knee jerk reaction on the news...


----------



## My Own Advisor

Wow, 500 more shares. I wish. Just hoping to afford 30-40 more shares this spring!


----------



## Jon_Snow

MOA, that's the beauty of being debt free - more money for stocks! Your time will come!

BTW, I look in on your site from time to time - it's pretty great. :encouragement:


----------



## My Own Advisor

Thanks Jon!

Yes, time will come, working on it...


----------



## OurBigFatWallet

Secretly I'm hoping CPG will acquire SGY in the next couple years since they both have assets in the same area. Colborne knows the assets of Surge would be attractive to a buyer, but not sure if that's the plan in the long term


----------



## humble_pie

idk, colbourne has not been a director of CPG for several years & CPG made no effort to acquire Tristar/petrobakken's properties back in the day ... 

if u really believe this u would have to be a buyer of surge, no?


----------



## Johnny M

I have no idea, and neither does anyone else, what will happen to this stock but with a supposedly safe dividend its well worth a buy at anything under $42. Analysts have been touting this stock for a long time but with a divi north of 6% its not likely to have any significant run up. Buy and hold for a nice divi.


----------



## OurBigFatWallet

humble_pie said:


> idk, colbourne has not been a director of CPG for several years & CPG made no effort to acquire Tristar/petrobakken's properties back in the day ...
> 
> if u really believe this u would have to be a buyer of surge, no?


I do own surge, but have no idea what will happen in the future with a possible buyout

CPG is a solid company (in my opinion) so if Surge can continue paying a steady dividend for the long term (like CPG) I'd be happy


----------



## gibor365

I was buying CPG mostly because of dividends....bought last year at 38.64, this Feb at 37.91... was planning to buy more on dips in this area, didn't expect at all that it will jump so fast to $44.... Again too bad didn't buy more back in Feb


----------



## humble_pie

leeder said:


> BNN reported there are rumours that CPG would acquire Torc Oil & Gas. This acquisition of CanEra may be the start of multiple acquisitions, similar to 2012.


interesting rumour & could have germ of truth

re acquisition of surge rumours (do not know how widespread, rumours may be confined to this forum alone) i've always thought that PC tended to favour marginal properties in hot areas but not necessarily hi quality properties, therefore perhaps less attractive as a buyout candidate ...


----------



## birdman

I have been in and out of CPG for a couple of years but get nervous with the share dilution when they issue more shares to pay the divy. While I understand they have lots of undeveloped properties which will no doubt improve profitability down the road it just doesn't seem sustainable that they can effectively borrow to pay the dividend. Could anybody enlighten me on this?


----------



## My Own Advisor

I wish I could frase!

I just know that cash flow has increased 3x since 2009. This is a good thing


----------



## AltaRed

My Own Advisor said:


> I just know that cash flow has increased 3x since 2009. This is a good thing


On a per share basis (which is all that really counts)? From my info, CF/S has decreased (4.76 - 2011) (4.65 - 2012) (4.39 - 2013) (2014?).

Earnings/share trend is even worse which suggests acquisitions are not accretive, at least not in the short term.


----------



## humble_pie

AltaRed said:


> On a per share basis (which is all that really counts)? From my info, CF/S has decreased (4.76 - 2011) (4.65 - 2012) (4.39 - 2013) (2014?).




altaRed with all due respect may i question the source of your cash flow figures?

i took mine from the company's news releases. Cash flow is always set forth as "funds flow" in each annual end-of-year press release. These are dated in march of each year.

the figures from 2010-2013 show steadily rising cash flow. Here we go:

2010: $3.70/sh
2011: $4.65/sh
2012: $4.83/sh
2013: $5.28/sh

these figures show a strong healthy uptrend.

might you be able to indicate your source, altaRed? could it be possible that the source is wrong? is the data possibly corrupted?

this can happen so easily in derivative data bases. You'll recall how many times the misleading data base issue has been discussed in this forum, how many times it's been suggested that investors seeking the most accurate statistics should Always Go to the Company Source.

as for earnings & dividend stability, CPG production is hedged going out 3-4 years, as it has always been. The stability of the dividend is underwritten by the hedge positions, not the earnings.

.


----------



## yyz

frase said:


> I have been in and out of CPG for a couple of years but get nervous with the share dilution when they issue more shares to pay the divy. While I understand they have lots of undeveloped properties which will no doubt improve profitability down the road it just doesn't seem sustainable that they can effectively borrow to pay the dividend. Could anybody enlighten me on this?


Where are you seeing that they issue shares to pay the dividend?That would be totally unsustainable and they wouldn't be in business.They have issued shares to buy out other companies yes but to pay the dividend?
You have proof of that?


----------



## AltaRed

humble_pie said:


> altaRed with all due respect may i question the source of your cash flow figures?
> 
> i took mine from the company's news releases. Cash flow is always set forth as "funds flow" in each annual end-of-year press release. These are dated in march of each year.


I got my 'quick numbers' above from the analytics provided by my Scotia iTrade Flight Desk trading software, though if I am seriously considering buying, I go to other sources such as the company's own reports for the most reliable data. The ones I quoted obviously are in significant variation to the ones you got from the company's own reports and why such a difference, I do not know. Therein lies the dilemma about data sources.

That said, I remain very wary about companies like CPG that dilute their shares on a regular basis for acquisitions and the longer term effects on EPS, potential writedowns on reserve purchase assumptions, etc. We saw this story with the O&G royalty trusts and some corporations. I worked for one at one time where the reserves writedowns (PAA or Purchase Accounting Adjustments) over the years via UOP (unit of production) depressed the earnings stream for years. One could argue that affects only those purchasing the new shares from a cash flow basis, but the overpayment of 'treasury cash' affects everyone's return eventually and that becomes only known in hindsight. We won't know if CPG's acquisitions will really be accretive for some time.


----------



## Homerhomer

yyz said:


> Where are you seeing that they issue shares to pay the dividend?That would be totally unsustainable and they wouldn't be in business.They have issued shares to buy out other companies yes but to pay the dividend?
> You have proof of that?


the share dilution though equity issues and DRIP is very significant, the future projects better all work out for them and if they don't the cashflow may not support the dividends since there is no earning to cover them.


----------



## humble_pie

thankx for reply altaRed.

knowing you a bit through your always-solid posts here, i knew that you had obtained your figures from a source that one would tend to rely upon.

scotia iTrade, in turn, would have gotten its data from another data base. Often these are big media-supported operations that do the best they can; however, inevitably all kinds of errors do tend to creep in.

this is another opportunity to underscore how we in cmf forum should always check back to companies' financial statements to verify our numbers. Data bases are fine for birds' eye views & general directional trends imho; but a refined final analysis needs fine-tuning from the source, je pense.

i appreciate your point about long-term dividend prospects casting a possible haze on accretive value in CPG. What sticks in my mind is that the hedged production is underwriting the dividend for several years to come. Surely that is enough time for investors to monitor developments & judge how the company is handling its debt & cash flow issues?

i don't believe even canadian banks have dividends pegged so far forward out in time.

thanking you again for input ... CPG is always an interesting issue to follow.

(aside to yyz) CPG does issue new treasury shares to shareholders who are DRIPPing, as do many other companies, especially in the energy sector. For many years, this has given rise to a pool of viewers - investors, outsiders, even short artists - who view the constant issuance of new treasury shares as dangerous dilution.

as it happens, i don't share this view; however a broad spectrum of opinion is always welcome.


----------



## AltaRed

humble_pie said:


> i appreciate your point about long-term dividend prospects casting a possible haze on accretive value in CPG. What sticks in my mind is that the hedged production is underwriting the dividend for several years to come. Surely that is enough time for investors to monitor developments & judge how the company is handling its debt & cash flow issues?


My concern is really not about continued ability to pay dividends because, as you say, the risk is diminished with a good hedging program. My longer term concern is ROE and ROCE. If one pays too much for future potential, that is a headwind against long term shareholder return on equity. Sooner or later, no matter how astute the management team, some of the acquisitions will not be accretive. I was encouraged for awhile when CPG had stopped making acquisitions, hopefully relying on organic growth instead. They have disappointed me yet again.

P.S. CPG has been on my watchlist for some time so it is not that I want to have a negative view of them. But I have seen addiction to acquisitions end badly. When I buy a stock, I buy it with the intent to hold it for decades and prefer to trust management with my (shareholders) money.


----------



## humble_pie

Homerhomer said:


> the share dilution though equity issues and DRIP is very significant, the future projects better all work out for them and if they don't the cashflow may not support the dividends since there is no earning to cover them.



once again, it's the hedging far into the future - for several years to come - that supports the dividends, *not* the earnings.

this simplistic notion that earnings must equal treasury issuances on an annual basis ought to be retired. Price per produced barrel of oil vs cost is a far better metric, as it relates directly to the hedging program.

i agree that it's easy for novice investors to be spooked into panic by the simplistic naysayers who have, for some reason, clustered around crescent point even though many other companies in the canadian energy sector issue shares in the exact same manner.

it's far better to consider subtle analytics such as those voiced by altaRed imho.


----------



## yyz

Ok share dripping is using shares to "pay " the dividend and yes there are many companies that do that.
But to say they are issuing share to pay the dividend is a bit of a stretch.


----------



## humble_pie

but they *are* issuing shares! they are issuing new treasury shares for every treasury DRIP dividend.


----------



## BlackThursday

humble_pie said:


> but they *are* issuing shares! they are issuing new treasury shares for every treasury DRIP dividend.


CPG issued about 20.3 million shares in 2013 for the DRIP which was about 5% of total shares at year end.
In comparison, CPG will pay 12.9 million shares for CanEra Energy + 192-million in cash and $348-million in debt assumption.


----------



## Homerhomer

BlackThursday said:


> CPG issued about 20.3 million shares in 2013 for the DRIP which was about 5% of total shares at year end.
> .


Now compound it every year ;-) add few purchases here and there and we have a huge and ongoing share dilution. Don't think it can go on indefinitely ;-)


----------



## yyz

For the full-year ending 31 December 2013, Crescent Point paid out $659 million of dividends in the form of shares, with 18,246,133 common shares issued through the DRIP. This represents 4.9% of the total share float outstanding at the start of 2013.


http://www.fool.ca/2014/04/04/the-truth-behind-crescent-point-energys-monster-dividend-yield/


----------



## AltaRed

Reminds me of the income trust treadmill that kept going faster and faster. More and more shares requiring more and more cash (or new stock) to pay dividends. As freely as the nudie cards handed out on sidewalks of the Las Vegas strip.


----------



## humble_pie

crescent point announced first quarter earning this am.

cash flow for quarter ended 31 march/14 was $1.45 vs $1.20 for Q1 prior year. A significant increase.

http://crescentpointenergy.mwnewsroom.com/Files/59/59ad6918-2c3b-47f8-9e7e-2c820c26485a.pdf


----------



## Jon_Snow

Yeah, I got up very early this morning for the announcement - CPG is certainly heading in the right direction. A little bump in the stock price would have been nice, but whatever. I'm holding this for the long term - and this mornings news makes me feel even better about doing so.


----------



## Synergy

Jon_Snow said:


> Yeah, I got up very early this morning for the announcement - CPG is certainly heading in the right direction. A little bump in the stock price would have been nice, but whatever. I'm holding this for the long term - and this mornings news makes me feel even better about doing so.


A lot of the energy stocks are in the red today! Positive earnings likely kept the price from falling further...


----------



## humble_pie

i need to go back & reflect on altaRed's point of view upthread. A knowledgeable but somewhat negative view is valuable when it comes to assessing CPG. I don't mean naiive pov's like OMG their-div-is-below-earnings-they-izz-doomed.

what's brewing in my mind is something to do with the hedging, with capturing forward cash to help pay the present dividend. I haven't got it all figured out; in fact i may never get it figured out!

but usually, with fancy schemes, there is a piper to pay. Some day, some way, somehow.

note that later on in their news release, CPG discusses the meaning of "funds flow" as they use the term to show cash flow. It doesn't accord with GAAP recognition of cash flow & they are the first to admit the same.

hmmmn food for thought, definitely not road kill.


----------



## Synergy

humble_pie said:


> but usually, with fancy schemes, there is a piper to pay. Some day, some way, somehow.


Another good reason not to have all your eggs in one basket! You just never know.


----------



## AltaRed

humble_pie said:


> what's brewing in my mind is something to do with the hedging, with capturing forward cash to help pay the present dividend. I haven't got it all figured out; in fact i may never get it figured out!


Simple hedging just 'guarantees' annual cash flows in each of the forward years, not capturing forward cash for today's dividends. BUT it is a cashflow management tool and management may be operating on thin, to virtually no, margin. Don't know what else might be in the covenants.

But what bothers me more than anything is their 'income trust like' behaviour, pacman type acquisitions, issuing shares for DRIPs, use of terms like 'funds flow', with an apparent disregard for shareholder equity. Something does not smell right. Are they rolling the dice on continued 'good' oil prices? Is there any margin for missteps? 

I spent a career in the O&G industry and this one does not sit well.....even though I would like it to be so. How can one can be that far outside the box on metrics? I had the same smell/feeling about Enron and never did consider their stock accordingly. We know how that ended.

So do I spend the time to tear this one apart to allay my fears? Or do I let some good folks here do that while I pay attention to other stocks?


----------



## Synergy

^ If you have some interest in the company why not voice your concerns with management and see how they respond? It would be an interesting read if posted in the CMF.


----------



## Jon_Snow

I hope the army of analysts who love this stock are right and not the doubters around here.

Only time will tell.


----------



## humble_pie

AltaRed said:


> Simple hedging just 'guarantees' annual cash flows in each of the forward years, not capturing forward cash for today's dividends. BUT it is a cashflow management tool and management may be operating on thin, to virtually no, margin. Don't know what else might be in the covenants.



hedging has been with cpg from the beginning, it's bred in their bones & borne in their blood, it's built into the DNA of the company.

so as time passes & the hedge cycles repeat themselves, hedging proceeds become part of each year's cash flow, no?

i may not have an accurate understanding of how hedging works in the O & G industry. I was imagining like commodities or options, u sell now for partial payment plus get the rest of the payment later when u deliver on the contract?




> But what bothers me more than anything is their 'income trust like' behaviour, pacman type acquisitions, issuing shares for DRIPs, use of terms like 'funds flow', with an apparent disregard for shareholder equity. Something does not smell right. Are they rolling the dice on continued 'good' oil prices? Is there any margin for missteps?



re "rolling the dice" it is true that we are coming out of more than a decade of sustained resource price rise, primary among them petroleum products.

this theory would imply a kind of momentum premium, i think. Which - theoretically speaking - could be reversed. Nuclear might not replace oil any time soon, but fracked gas might.

come to think of it, though, cpg is also in the fracked gas business.


----------



## AltaRed

humble_pie said:


> so as time passes & the hedge cycles repeat themselves, hedging proceeds become part of each year's cash flow, no?
> 
> i may not have an accurate understanding of how hedging works in the O & G industry. I was imagining like commodities or options, u sell now for partial payment plus get the rest of the payment later when u deliver on the contract?


I do not have direct experiences with hedges but the standard hedge I am aware of is to simply fix the price of a certain percentage of their production in a current or forward year. The only obligation is to deliver the production, with penalties if they do not do so. They get paid on delivery.

I suppose there may be contracts where partial payment is received now, but if so, that would surely depress the commodity price in the hedge (loan with interest). Nothing is for free. One would have to dig deep into the footnotes of the financial statements to find out what CPG's hedges are. I am not motivated to dig into them to find out.

Added: Perhaps some analysts have examined that and owners of CPG here may be aware of the details.


----------



## CPA Candidate

CPG enters into fixed price oil, gas, power, foreign currency, interest rate, cross currency interest rate, cross currency principal and crude oil differential contracts to manage its exposure to fluctuations in the price of crude oil, gas, power, foreign exchange and interest on debt. Standard treasury risk management practices. It's best to know how much you will get for your product or pay for your inputs in the future for planning purposes.


----------



## yyz

And another acquisition 

http://crescentpointenergy.mwnewsroom.com/Files/64/6400b884-82d4-43b1-a15a-1512130a0904.pdf

And the market seems to like it.


----------



## Ethan

I have my reservations about CPG due to the high dividend and proportionately low earnings.

I have no problems with their hedging program though. I would be surprised to find a single oil company on the TSX that does not hedge, or any commodity producer for that matter. Commodity prices are volatile, and the producers have very little ability to manage the price. Futures and forwards give the producer cost certainty on a portion of their expected production. I'd be more concerned if they didn't have a hedging program in place.


----------



## MrMatt

The numbers look good.
I'm okay with hedging.

But there has been a lot of insider sales lately, while some insiders have disposed of significant amounts of stock, the CEO is only shaving a bit off his position.

I've also looked at COS as a comparison, some insider sales there too. Are they just taking money off the table while times are good?

I wonder if they're just ta


----------



## Synergy

MrMatt said:


> The numbers look good.
> I'm okay with hedging.
> 
> But there has been a lot of insider sales lately, while some insiders have disposed of significant amounts of stock, the CEO is only shaving a bit off his position.
> 
> I've also looked at COS as a comparison, some insider sales there too. Are they just taking money off the table while times are good?
> 
> I wonder if they're just ta


It's pretty close to the highs of 2011 & 2012. Perhaps a little profit taking in anticipation that the stock might drop back into it's trading range? I'm yielding over 7% so it's hard to consider attempting to "trade the range". I'm also holding COS and BTE which are also yielding me over 7%. I'm keeping a close eye on my energy holdings and so far haven't decided to lock in any profits.


----------



## OurBigFatWallet

CPG recently raised their forecasted average output and exit production. 

http://www.calgaryherald.com/business/Crescent+Point+beats+production+forecast/10114941/story.html

And for the first time in a while they are talking about increasing the dividend. Not sure if it will actually happen or not but the increase in cash flows to make it a possibility is a good sign


----------



## humble_pie

scott saxberg is a good illustration of a peculiar view i have which goes that the first thing to check out for any small or midcap whose shares you're thinking of buying is Who Are They.

what kind of business history does management & direction have? what have been their leadership acomplishments so far? how have they managed their corporate responsibilities during hard times? how skilfully do they deal with challenges? are there any scandals or avoidable failures attached to their histories?

i first bought CPG when it was a small unit trust. A convincing fact was scott saxberg at the helm. A petroleum engineer from U of Manitoba, saxberg like many others had known about the deep bakken fields ever since his student days. It had always been thought that the bakken was not drillable.

but saxberg thought otherwise. He believed that the then-new horizontal drilling technology could open up the bakken.

the story goes that the oil moguls at the petroleum club in calgary hooted & howled at him. Not daunted in the least, saxberg got financing from US venture capitalists & commenced buying up bakken properties. Since the structure of unit trusts at the time (this was prior to their reform) prevented them from owning reserve properties, saxberg assembled his acreages in a sister company named, i believe, pine bay. Apparently crescent point & pine bay were names of places where saxberg's country cottage was located.

roll forward history & crescent point is now included among canadian oil-producing majors. Its price has more than doubled from unit trust days; its dividend yield has mostly remained north of 7%; its options can be sold in both canada & the US; & saxberg is still very much at the helm.


----------



## gibor365

HP. what is your look on CPG going forward?


----------



## webber22

Back to their old tricks again, issuing 750M of new equity at $43.40 to acquire Lightstream Resources. That's a 2.30% hit to the price tomorrow


----------



## My Own Advisor

Just read that...
http://www.marketwired.com/press-re...loration-success-upwardly-tsx-cpg-1943253.htm


----------



## Jon_Snow

As long as CPG dividend gets paid in September, it's just background noise to me. I will hold CPG until I have to wear Depends. :biggrin:


----------



## doctrine

May I point out that acquiring at $100k per flowing barrel doesn't seem cheap to me compared to what's out there (LTS reports $114.7k in fact), and that basing the acquisition on $100/barrel WTI and $4.65 nat gas is optimistic given that market rates are currently well below that. Just my two cents. This might be a better deal for LTS.


----------



## Synergy

I'd have to agree with the above, at least in the short term. I trimmed my position and would consider buying back if there's some further weakness - $38-39.


----------



## JordoR

Yeah movement on CPG doesn't concern me too much, and I'm usually pretty happy having bought in at $38. I will just keep dripping it for years to come likely. Although if I could read the future, I probably would have sold at $47 and bought again now :biggrin:


----------



## humble_pie

doctrine said:


> May I point out that acquiring at $100k per flowing barrel doesn't seem cheap to me compared to what's out there (LTS reports $114.7k in fact), and that basing the acquisition on $100/barrel WTI and $4.65 nat gas is optimistic given that market rates are currently well below that. Just my two cents. This might be a better deal for LTS.



but lightstream was petrobakken was tristar O & G & once upon a time paul colbourne - now of surge energy - was a director of both CPG & TOG. It used to be said that cpg & tog battled furiously for the best bakken properties & cpg nearly always won out.

so i'm wondering whether finally swallowing up what's left of the old tristar properties & putting its ancient rival into terminal slumber is viewed as an accomplishment for which cpg would pay a certain premium?


----------



## Synergy

CPG and BTE are taking it on the chin over the last few weeks after a nice run up earlier this year. Glad I trimmed my energy holdings a while back. Any buyers? I'd be willing to buy more CPG at around $38-39 and BTE at around $39-40 if they ever come back down to those levels.


----------



## My Own Advisor

Happy to buy more CPG @ $38. Bring it on...go lower!!!


----------



## warp

Synergy said:


> CPG and BTE are taking it on the chin over the last few weeks after a nice run up earlier this year. Glad I trimmed my energy holdings a while back. Any buyers? I'd be willing to buy more CPG at around $38-39 and BTE at around $39-40 if they ever come back down to those levels.


Both are down with the decrease in the price of oil.
Baytex looks interesting again, with that nice yield. Not sure if it will fall below $40...but I am watching it.


----------



## Jon_Snow

I'm watching these two (CPG and BTE) like a hawk... a VERY HUNGRY hawk.


----------



## AltaRed

Those with high payout ratios will be hit hardest if and when oil prices continue to swoon. Production cannot be maintained or grown on a per share basis if margins shrink dramatically and capital reinvestment is starved due to irresponsible dividend policy.


----------



## Homerhomer

looks like many of us are waiting for BTE to hit 40 range, I will be a buyer as well, not interested in cpg, don't like the constant and steep increases in the number of shares.


----------



## AltaRed

warp said:


> Baytex looks interesting again, with that nice yield. Not sure if it will fall below $40...but I am watching it.


What is its current payout ratio, and what is its cash margin (never mind earnings margin)? I believe it has a higher cost of production because of its production mix.


----------



## gibor365

Homerhomer said:


> looks like many of us are waiting for BTE to hit 40 range, I will be a buyer as well, not interested in cpg, don't like the constant and steep increases in the number of shares.


agree ... CPG doing it too much... would lile to buy more BTE at 40, unfortunately, both those stocks im my TFSA and maxed...so need to sell something to buy something


----------



## Jon_Snow

I've pretty much decided to buy more BTE tomorrow, especially if it falls further.... would like to buy 300 shares, to bring my current 700 to a nice even 1000. 

My CPG holding is probably ample at 3000. :hopelessness:


----------



## Islenska

Good example for buying on margin

6.5% yield, 3% margin cost and hopefully decent capital gain down the road


----------



## warp

Islenska said:


> Good example for buying on margin
> 
> 6.5% yield, 3% margin cost and hopefully decent capital gain down the road


I'd be careful with buying on margin.

A lot can happen...a div cut, a price drop, company specific problems, market drops, etc.

I have seen people get in deep trouble, and take huge losses, with margin buying.
I'm not about to tell you what to do....I'm saying be careful


----------



## CPA Candidate

CPG is extensivley hedged, dips in the price of oil make very little difference. This goes for most producers, to varying degrees. Most have been taking losses on their derivative contracts because they locked in prices below the recent run up in oil. Not too mention that Canadian producers don't go off WTI prices, and the differential has shrunk recently. You can bet that a lot of these producers were locking in next years prices when oil was high this past summer. There is nothing to worry about in the near term.

As far as CPG's last acquisition, it's accretive to cashflow when you consider the additional shares issued by 3% per share. Investors selling their shares when they stand to gain 3% when dilution is factored in are not thinking clearly.

What we are seeing across the Canadian energy market in the last few weeks/days is simply a knee jerk type of reaction, not based on sound analysis.


----------



## humble_pie

CPA Candidate said:


> CPG is extensivley hedged, dips in the price of oil make very little difference ...
> 
> What we are seeing across the Canadian energy market in the last few weeks/days is simply a knee jerk type of reaction, not based on sound analysis.




idk, what i'm seeing are possibly not knee jerks but something more serious. Worldwide we seem to be watching a gradual dissolving of resource & commodity prices. It could turn into prolonged deflation.

any guess why is good enough. Demand from china/india/asia shrinking. Europe profoundly destabilized. Britain thinking to bolt from the EC. Problems in ME & north africa growing always more severe, not less severe.

gold & oil are often said to be roughly linked & we are seeing gold plummet. The lonewolves on kitco point out that gold hit a death cross today. Our very own wolf might say something scarier.

possible rays of light: LME copper inventories appear to be at record lows. Although deflation could keep em low for 18 months, 2 years perhaps. Who is still buying Dr. Copper, bellwether of the global economy? people have learned to make do with what they've got, the only sectors still spending hugely are the military.

another ray: the strong US dollar. This should help crescent point & other canadian raw materials producers selling into global markets but with some costs fixed in CAD.

.










.


----------



## fatcat

humble_pie said:


> any guess why is good enough. Demand from china/india/asia shrinking. Europe profoundly destabilized. Britain thinking to bolt from the EC. Problems in ME & north africa growing always more severe, not less severe.


i have a somewhat different impression which is not so much that demand is shrinking but that supplies are actually pretty robust and finally those folks that are _playing_ oil based on international instability are throwing in the towel since we see oil resilient to conflict and supplies just not getting hampered as expected ... there is plenty of oil around and we just seeing a price correction to come in line with supply/demand unaffected by global instability


----------



## humble_pie

for the sake of my 5600 sh of cpg i sincerely hope so each:


----------



## fatcat

humble_pie said:


> for the sake of my 5600 sh of cpg i sincerely hope so each:


5600 ? ... no wonder you follow them so closely ... plz provide a heads up if and when you are selling ... each:


----------



## Islenska

That is impressive HP, a nice monthly return, so good for you!

I've too much resources currently but their day will return, meanwhile can't beat dividend payer

More of a Baytex man!


----------



## Jon_Snow

Whoa, I'm small time with my 3000. :biggrin:


----------



## OurBigFatWallet

HP and Jon Snow: would you buy more and if so, what price?


----------



## Killer Z

OurBigFatWallet said:


> HP and Jon Snow: would you buy more and if so, what price?


5600 and 3000? Wow, that is an impressive demonstration of conviction. I never worry about CPG as the dividend makes it easier to wait out the dips.


----------



## humble_pie

Islenska said:


> ... More of a Baytex man!



good for you, baytex may actually be a better choice!


----------



## humble_pie

fatcat i'm not planning to sell other than the usual OTM call options, which i've always sold since day one.

but my approach is probably useless for others since, as it happens, i have a high tolerance for risk.

also the presence of short calls hinders selling the shares. In fact, encumbering a portfolio with tiers of hanging options is a way to ensure that the underlying stocks can never be sold :biggrin:

what with its dividends & its mild options, cpg for me is a low-maintenance stock that is reasonably profitable. 

i think if anyone is looking to put on a new position in cpg these days, he would first want to address the overall question of lagging resource stocks, ie are these forecasting a significant recession trough. Me i feel this might be the case.

then there is the issue of the cpg dividend. It's a controversial issue. It's been well discussed & aired out upthread.

historically, cpg has shown a decent buying level in the high 30s. One can get down there now with a simple buy-write covered call. 

jon snow might be an early nibbler in BTE these days but long-term he won't be sorry. Perhaps the keyword here is nibble? if one feels one must buy, reduce number of shares & reserve cash for later?


----------



## My Own Advisor

Killer Z said:


> 5600 and 3000? Wow, that is an impressive demonstration of conviction. I never worry about CPG as the dividend makes it easier to wait out the dips.


You got me beat big time, I have enough to DRIP but *not that much* - nicely done folks :biggrin:

You own BTE as well Humble?


----------



## OurBigFatWallet

CPG hit $39.18 today....did anyone buy?


----------



## Jon_Snow

Well, the majority of my CPG position was acquired at $37, so I am more than fine holding what I have. If it goes below $37... well, that would get me thinking.


----------



## HaroldCrump

humble_pie said:


> idk, what i'm seeing are possibly not knee jerks but something more serious. Worldwide we seem to be watching a gradual dissolving of resource & commodity prices. It could turn into prolonged deflation.
> any guess why is good enough. Demand from china/india/asia shrinking. Europe profoundly destabilized. Britain thinking to bolt from the EC. Problems in ME & north africa growing always more severe, not less severe.
> gold & oil are often said to be roughly linked & we are seeing gold plummet. The lonewolves on kitco point out that gold hit a death cross today. Our very own wolf might say something scarier.


The US Q2 GDP data was the clue...they blamed the weather, everyone did.
But IMHO it was not just the weather.
The US GDP is barely managing to stay above recession levels (i.e. 2 quarters of declining growth).
There is lots & lots of govt. spending (wars, etc.) propping up the GDP numbers.

If a proper inflation deflator were used, chances are that real GDP may already have slipped into recessionary territory.

The trouble with these stats is that they are not leading indicators of a recession...these are all trailing indicators.
The timing of tapering was not good last Oct.
It was more due to optics (Bernanke leaving and Yellen taking over - he wanted to be the one to initiate the taper of his own policies), than with fundamental strength in the real economy to justify the taper.

The falling commodity prices are also indicating that the Chinese property bubble may have already begun deflating.
It is too late for the People's Bank to act now.

Q/E has kept the prices of commodities up for a while now.
Not just US Q/E, but Chinese, Japanese, and pretty much global Q/E.



> another ray: the strong US dollar. This should help crescent point & other canadian raw materials producers selling into global markets but with some costs fixed in CAD.


Strong US $ is very bad news for the US economy & the Fed.
It may help a handful of individual stocks, but overall it is bad.
The US does not want a strong $ - they want a weak $, weaker than what it was in spring of 2014, but it has instead strengthened since then.

It would be interesting to watch what policy the Fed & the Treasury adopt in 2015 to weaken the $.
IMO, that will determine the direction of commodities in 2015.


----------



## birdman

Dipped my toes in it at 39.56


----------



## leeder

CPG (along with most energy names) has gotten hit hard. What are your strategy with this name? It's currently yielding close to 9%. Sustainable? Thinking hard on selling to net out my capital gains for the year, but at $30ish seems such a great time to buy a well run company...


----------



## My Own Advisor

but at $30ish seems such a great time to buy a well run company...

If I had a boatload of money, I'd be buying these guys right now....SU, COS, BTE, CPG, CVE, CNQ...

I hope to buy more in about, oh, 5 weeks.


----------



## leeder

@ MOA: I know what you mean. At the same time, I'm thinking of reducing the tax bill. If I sell now and the prices are still depressed in January, buy back in. By that time, it'd be perfect timing as it would be beyond the 30 day window.


----------



## Greyhound86

I have bought and sold CPG a few times over the years. First bought it in Feb 2009 for $23.74. Hope it doesn't get that low again.

Right now we only have a small position (less than 1% of total) of 150 shares that cost 39.70 in my wife's RRSP. She is still ahead as 4 years worth of dividends are higher than the loss in share price. 

The last time the stock price collapsed it peaked in June 2008 and hits it low in Dec 2008. It recovered by Nov 2009.


----------



## Synergy

I've got a ton of capital gains to deal with this year (investing, business, etc.) so I'm thinking of selling my position in BTE & CPG - tax loss. In hopes to buy them back in 30+ days.

What do you guys think about doing a little tax loss selling with these guys. I don't need any income and they will help to offset a portion (small portion) of my capital gains for the year? I'm glad I waited so far, just can't seem to pull the trigger. Anyone else doing a little tax loss selling???


----------



## Synergy

Jon_Snow said:


> Well, the majority of my CPG position was acquired at $37, so I am more than fine holding what I have. If it goes below $37... well, that would get me thinking.


What are you doing now that CPG sits at just over $30??


----------



## Synergy

leeder said:


> @ MOA: I know what you mean. At the same time, I'm thinking of reducing the tax bill. If I sell now and the prices are still depressed in January, buy back in. By that time, it'd be perfect timing as it would be beyond the 30 day window.


I'm thinking the same.


----------



## Greyhound86

I have no idea when the time to sell or buy is but if you decide to sell now and things change in that you don't want to wait the 30 days, you could purchase the XEG ETF instead to capture any rebound.


----------



## humble_pie

Greyhound86 said:


> ... if you decide to sell now and things change in that you don't want to wait the 30 days, you could purchase the XEG ETF instead to capture any rebound.



cheapest of all, go buy enough calls in husky or baytex or arx to replace, dollar-wise, the cpg you're selling, if exercised.

one can also buy calls in XEG but it's not the same kind of underlying.


----------



## doctrine

Tax loss selling is a great idea. Everything is beaten up. If you want to stay in the sector, just invest in another equally destroyed stock.


----------



## al42

doctrine said:


> Tax loss selling is a great idea. Everything is beaten up. If you want to stay in the sector, just invest in another equally destroyed stock.


Ha Ha, can you find 1 that hasn't been destroyed? everything I own in the sector is destroyed!


----------



## gibor365

al42 said:


> Ha Ha, can you find 1 that hasn't been destroyed? everything I own in the sector is destroyed!


CVX affected the least


----------



## humble_pie

doctrine said:


> ... just invest in another equally destroyed stock.



no, don't buy the stock. What if oil stocks fall further. Just buy the calls instead.

example:

- sell 1000 sh CPG & crystallize the tax loss
- buy jan 2015 $25 calls in HSE. You'd need 12 calls, each call = 100 sh
- the jan 25s closed today at .86-.94, one might have paid .91-.92
- total cost $1,104

why buy a replacement stock now & put more dollars at risk? some are saying the plunge in oilcos is not over yet, in fact the elimination of heavily-indebted & poor balance sheets has not even begun. 

imho it's far too soon to call the energy market other than turmoil.

what if replacement stock, in turn, takes a bad hit? with a small package of calls, at least you're insured against any possible big rise in CPG/HSE at a low cost of only $1104. Another big drop in energy shares won't hurt in the least, because you won't be owning energy shares ...


----------



## OurBigFatWallet

TOU wasn't hit nearly as bad today as others.

It's actually good timing for anyone looking to sell their losers for tax purposes. I have a couple clients who do this every year. Just make sure you wait 30 days to buy it back to avoid the superficial loss rule.


----------



## Synergy

OurBigFatWallet said:


> TOU wasn't hit nearly as bad today as others..


TOU is on my watchlist, but Environment Canada is predicting a warmer & shorter winter so this may not be good news for them.

Sold my CPG for a tax loss sale today. Still in the green for the year after taking into consideration the profits I took earlier in the year and the diviends. Hoping to buy back in early 2015.


----------



## My Own Advisor

Down almost 4%.

Good call on selling, I suspect you'll be able to get back-in around $25. Just a hunch that's the floor, a few more bucks to go...


----------



## leeder

I sold this at $30.10 last week. I do see the stock going up in time, but selling now allows me to lower my tax bill and use the money to invest in something else. I'm currently looking at midstream/infrastructure names like Altagas and Gibson Energy that are beaten up, and I have no idea why.

I may come back to Crescent Point in a month or so if the price is still depressed and my analysis shows the dividend is sustainable.


----------



## Pluto

leeder said:


> I sold this at $30.10 last week. I do see the stock going up in time, but selling now allows me to lower my tax bill and use the money to invest in something else. I'm currently looking at midstream/infrastructure names like Altagas and Gibson Energy that are beaten up, and I have no idea why.
> 
> I may come back to Crescent Point in a month or so if the price is still depressed and my analysis shows the dividend is sustainable.


Curious if got around to your analysis and if you think the dividend is in jeopardy. This stock is of interest, but everything seems to be premised on oil price recovery to maybe 80 in a year or two.

(Recalling the 1980's, similar to present times, with the price of oil all over the map, and OPEC in disarray, it was a no brainier to buy the producers with tons of oil assets and a balance sheet to survive when the oil price was hammered down. But that was all in retrospect. Too bad I was too scared to buy when the worst happened. So here we are, deja vu, all over again.)


----------



## leeder

Pluto said:


> Curious if got around to your analysis and if you think the dividend is in jeopardy. This stock is of interest, but everything seems to be premised on oil price recovery to maybe 80 in a year or two.
> 
> (Recalling the 1980's, similar to present times, with the price of oil all over the map, and OPEC in disarray, it was a no brainier to buy the producers with tons of oil assets and a balance sheet to survive when the oil price was hammered down. But that was all in retrospect. Too bad I was too scared to buy when the worst happened. So here we are, deja vu, all over again.)


I haven't done an in-depth analysis. However, I did look into the sustainability of the dividend. Over the short term (i.e., 1 year), CPG can maintain its current payout. Management has done a good job of hedging its oil to higher prices. It has also maintained a strong balance sheet. Some news articles have indicated that CPG is in a position to acquire assets from troubled oil companies.

If low oil prices are here to stay for the long term (beyond 2015), all bets are off with the dividend.

As mentioned before, I sold this stock to reduce my capital gains. I held this stock for 3 years and the only gains I made were through the dividend. When oil prices went south, I actually lost money on a total return basis. At this point, when the new year rolls around, I will reassess if I should buy back in or invest in other names.


----------



## OurBigFatWallet

Steady dividends for the past 10 years. I'm hoping they can ride this one out. They successfully held up well in 2008 so hoping the same here


----------



## My Own Advisor

Now around $25. A good entry point.


----------



## gladaki

My Own Advisor said:


> Now around $25. A good entry point.


Agree ..Any thoughts on Meg


----------



## leeder

gladaki said:


> Agree ..Any thoughts on Meg


Let's not delve into MEG in a CPG thread.


----------



## 0xCC

Ok, taking a beating today (down around 8.5% to under $23). Is the market totally crazy or is it seeing something I'm not?

I bought my initial position in this back in 209 at around $18. I only added to it this summer at $43.35 when it did that round of stock offering (seemed like a great deal back then). Now it is getting back to my original purchase price. The market seems convinced they are going to cut their dividend. I would be probably be comfortable with this stock even if they did cut their dividend by 50% (if that was the most they cut it by and if they increased it quickly once oil prices moved back up again and stabilized).


----------



## Toronto.gal

^ You were up 141% if you added at $43+. Did you ever take profits/rebalance?

There have been some examples here where big profits evaporated.


----------



## 0xCC

Toronto.gal said:


> ^ You were up 141% if you added at $43+. Did you ever take profits/rebalance?
> 
> There have been some examples here where big profits evaporated.


Nope, never took profits. I'm in for the cash flow and my overall strategy is all about getting investment income to match or exceed our household spending.

My limit order went though this morning, increased my position by 25% at $22.48. As I said I would be ok with this stock at this level even if the dividend was cut by 50%. As of this morning's trade CPG now accounts for 4.6% of my portfolio's annual income.


----------



## gladaki

0xCC said:


> Nope, never took profits. I'm in for the cash flow and my overall strategy is all about getting investment income to match or exceed our household spending.
> 
> My limit order went though this morning, increased my position by 25% at $22.48. As I said I would be ok with this stock at this level even if the dividend was cut by 50%. As of this morning's trade CPG now accounts for 4.6% of my portfolio's annual income.


They are trading at 21.76. Right now every thing is falling knife....we will see these keep going down till mid jan may be....


----------



## OurBigFatWallet

As long as oil keeps falling I think this one (along with all the other oil stocks) will keep falling too. Great opportunities for those looking to buy and hold for a few years


----------



## Plugging Along

I am looking in the 10-15 year horizon.

My plan is to put my 2015 TFSA amount In, then when I see a little turn, that is my trigger to buy. I will see if I actually follow that plan.


----------



## gladaki

CPG: From 2004 to 2007 they were mainly below 20$, How many acquisitions they did after that....they were
trading above 30 after 2008...what changed?


----------



## CPA Candidate

CPG making a big move off the bottom. From < $22 to $27ish in two sessions including today.


----------



## moose

CPA Candidate said:


> CPG making a big move off the bottom. From < $22 to $27ish in two sessions including today.


Although I haven't done the research to support my opinion, I feel that this move up is too much too fast. I have a feeling it will drift down a bit over the next few weeks.


----------



## blin10

sold this one today to lock in some profit... will re buy again if it goes to 22-23


----------



## JordoR

moose said:


> Although I haven't done the research to support my opinion, I feel that this move up is too much too fast. I have a feeling it will drift down a bit over the next few weeks.


I hope it remains low for the next few weeks, because I would like to add to my position and average down a bit when the new TFSA amount comes into play.


----------



## Jon_Snow

I really hope that people have been buying this up in the last few weeks. CPG at these prices is like an early Christmas.


----------



## CPA Candidate

Jon_Snow said:


> I really hope that people have been buying this up in the last few weeks. CPG at these prices is like an early Christmas.


No, early Christmas is waking up tomorrow and WTI is $106. Cha-ching!


----------



## JordoR

Another big day for CPG. I wish I would've listened to my instincts and averaged down my position and bought some at ~22. Quite honestly I didn't expect a third big day in a row...


----------



## My Own Advisor

I didn't see this coming.....I suspected it would stay low for a few weeks....

Damn.


----------



## HaroldCrump

Don't worry...oil aint going nowhere...it's still falling.
Let the euphoria of Fed decision, Santa rally, etc. play out.
Let's see what happens in the 2nd/3rd week of Jan.

As Yellen said yesterday..._patience_


----------



## fatcat

HaroldCrump said:


> Don't worry...oil aint going nowhere...it's still falling.
> Let the euphoria of Fed decision, Santa rally, etc. play out.
> Let's see what happens in the 2nd/3rd week of Jan.
> 
> As Yellen said yesterday..._patience_


+1 ... winter doesn't set in for 3 days ... it might well dawn cold and unforgiving ... keep those oil certificates handy because you might need to stuff em under your long underwear for insulation

on the other hand look on the bightside, putin might start world war 3 which would be _very good_ for oil shares

this is being played out so far above our heads i don't know how anyone can call the value on _any_ oil stock atm


----------



## Pluto

This is the type of rally one should be suspicious of. Keep in mind that a sustained rise in these oil stocks is premised on oil prices bottoming out, the oversupply dissipating, and oil prices rising again. If the premise is false, these stocks are not bargains. Right now the asset these companies have, has sustained a very serious downsizing. Personally I don't think the premise is false, but there is a long way to go to prove that. The odds are very high there will be another sell off in oil stocks that may or may not take us below the recent bottom. this is still early in this crisis. the only thing that could end the crisis soon, is a production cut, and that isn't happening. so the over supply and corresponding low oil prices has to dissipate over time. 

Your thinking and feelings should not be reflecting the present bounce in stock prices, they should be anticipating the future. You shouldn't take what happened over 3 days and project it into the future. Rather you should assume there will be a reversal, then keep an eye out for clues how powerful the reversal is - powerful in terms of % price drop, and volume.


----------



## My Own Advisor

HaroldCrump said:


> Don't worry...oil aint going nowhere...it's still falling.
> Let the euphoria of Fed decision, Santa rally, etc. play out.
> Let's see what happens in the 2nd/3rd week of Jan.
> 
> As Yellen said yesterday..._patience_


Thanks Harold...voice of reason!


----------



## CPA Candidate

CPG bounced back because it was absurdly oversold. The "efficient" market overshot by a mile as usual.


----------



## OurBigFatWallet

Funny, with oil going down I can see this going back down in the short term. But then again who knows. Maybe it will shoot back up to $35 where it belongs


----------



## gladaki

CPG announced 28% spending cuts no dividend cuts for now


----------



## Jon_Snow

Most excellent.


----------



## 0xCC

They seem fairly committed to keeping the dividend at current levels as long as possible.

From their capital spending press release:

Crescent Point has one of the strongest balance sheets in the sector, with significant financial flexibility. In addition, the Company has a strong risk management program, with oil and natural gas hedges in place until mid-2017 and early 2018, respectively. Currently for 2015, Crescent Point has more than 50 percent of its oil production hedged, net of royalties, with an average price above CDN$90.00/bbl and 53 percent of its natural gas production hedged, net of royalties, with an average price of CDN$3.60/GJ.

Similar to previous oil price cycles, Crescent Point aims to use this period to further strengthen the overall position of the Company. Given the strength of its balance sheet and the levers discussed above, Crescent Point is well-prepared to weather the current commodity price environment.​


----------



## yyz

They have never reduced the dividend.


----------



## dubmac

HaroldCrump said:


> Don't worry...oil aint going nowhere...it's still falling.
> Let the euphoria of Fed decision, Santa rally, etc. play out.
> Let's see what happens in the 2nd/3rd week of Jan.
> 
> As Yellen said yesterday..._patience_


I read Harold's comment above - looks like he was on to something. don't know if this one will drop below 22.16, but we'll see.


----------



## 0xCC

yyz said:


> They have never reduced the dividend.


They haven't raised it much in the last 5 years either (if at all), that should give them some wiggle room and the combination of the capital spending cuts and hedging should keep their cash flows in reasonable shape as long as oil doesn't stay at these levels for an extended period of time (i.e. longer than their hedges).


----------



## My Own Advisor

I suspect a dividend cut is coming. The yield is high. Not sustainable IMO long-term.


----------



## CPA Candidate

0xCC said:


> They seem fairly committed to keeping the dividend at current levels as long as possible.
> 
> From their capital spending press release:
> 
> Crescent Point has one of the strongest balance sheets in the sector, with significant financial flexibility. In addition, the Company has a strong risk management program, with oil and natural gas hedges in place until mid-2017 and early 2018, respectively. Currently for 2015, Crescent Point has more than 50 percent of its oil production hedged, net of royalties, with an average price above CDN$90.00/bbl and 53 percent of its natural gas production hedged, net of royalties, with an average price of CDN$3.60/GJ.
> ​


The market hated CPG for all its share issuing and hedging that held it back when times were good, but they are now positioned better than nearly any other company during a collapse of the industry. 

With 50% of 2015 hedged at $90, and a spot price of $50 for the entire year, they'd average $70 which sounds great in this environment. $3.60 for gas is also a very good price compared to current spot.


----------



## Jon_Snow

Good to see that some do their research round' here. Nice work CPA...


----------



## OurBigFatWallet

I still like CPG, for the reasons outlined above by CPA student. If/when oil climbs back up I think we'll see a nice bump for CPG (along with many others)


----------



## Jon_Snow

Oh I think if oil starts to claw its way higher, CPG and others will see more than a "bump". It will be a relief rally like few others.


----------



## 299889

I plan on opening my first account Wednesday (Tomorrow) and was planning on making CPG the biggest name in my portfolio, I am limited in my funds of <$1000 and plan on buying approx. $800 worth, should I wait a bit and see if it keeps dropping? It went down over two dollars and today its gone up, will it keep going up was this a fluke? I expect it will go down closer to around $22. Should I Keep waiting or scoop it up now and not loose my opportunity.


----------



## yyz

Your guess is as good as my guess where it will go.Volatility is par for the course with oil prices right now.


----------



## My Own Advisor

I have no idea where oil will go, nor CPG. Lower, higher, who knows.

That said, with it around $25, considering where it WAS 3 months ago, seems like a decent deal.


----------



## yyz

MOA I agree and actually added to CPG yesterday.At $25 I'm comfortable with it and the track record of not reducing the dividend.

eeehitscody, if you want to look at energy today,you need to be thinking about a few years from now.You will be rewarded.If your looking for a quick buck take your chances because it's a wild ride an it isn't over.


----------



## leeder

eeehitscody said:


> I plan on opening my first account Wednesday (Tomorrow) and was planning on making CPG the biggest name in my portfolio, I am limited in my funds of <$1000 and plan on buying approx. $800 worth, should I wait a bit and see if it keeps dropping? It went down over two dollars and today its gone up, will it keep going up was this a fluke? I expect it will go down closer to around $22. Should I Keep waiting or scoop it up now and not loose my opportunity.


$800 worth of shares isn't a whole lot to sink your teeth into. Depending on your discount brokerage, commission would have eaten up a lot of your capital.


----------



## humble_pie

eeehitscody said:


> I plan on opening my first account Wednesday (Tomorrow) and was planning on making CPG the biggest name in my portfolio, I am limited in my funds of <$1000 and plan on buying approx. $800 worth, should I wait a bit and see if it keeps dropping? It went down over two dollars and today its gone up, will it keep going up was this a fluke? I expect it will go down closer to around $22. Should I Keep waiting or scoop it up now and not loose my opportunity.




eecody congratulations on saving up these funds & more importantly, for thinking constructively about how you could deploy these savings to enhance the long term situation. These are already accomplishments!

but i do have reservations about focusing on one single stock with a small amount of capital. Most brokers will punish a small account with larger fees, although it's my understanding that Questrade accepts minimum $1k accounts with pleasure. Generally speaking, most other brokers are looking for a minimum of $25,000.

so first, please check your broker. Make sure they have no fees for a small startup account that could be inactive for periods of time. Make sure also that you understand the commission schedule, it could be harsh for tiny accounts.

next, with $1k it's more prudent for a new investor to buy an index fund or an ETF in order to diversify the risk. If you can tolerate the volatility in the energy sector, 2 well-known energy sector ETFs are XEG from blackrock & ZEO from bmo. Others with knowledge of the vanguard products would have an excellent candidate from vanguard.

another way to approach would be to invest in the TD e-series funds, although they don't include an energy-specific e-index fund. The closest would be the canadian equity e-series, with 19% weighting in canadian energy stocks. However, this e-fund would give you a more diversified, less risky participation in the overall canadian market than an energy-specific fund.

an advantage of e-funds for new investors is that there are no broker commissions to buy or to redeem, when held directly with TD investor services (this is not TD the discount broker service.)

http://www.tdcanadatrust.com/produc...funds/td-eseries-funds.jsp#what-does-td-offer


lastly, here is a caution about the oil sector in general at this point in time. No one seems to be paying attention to quiet warnings like this one, which mentions the long-drawn-out price breakdown that is typical of big swings in the energy cycle, such as the down cycle we are experiencing right now.

http://canadianmoneyforum.com/showt...l-has-bottomed?p=500081&viewfull=1#post500081

perhaps - considering the caution - a new investor with $1000 might consider purchasing an equity e-fund with $500 & putting the other $500 safely away in a HISA account? they say People's Trust is paying 2.50% right now, with funds on call on 24-hour notice, so you would not be losing.

best of luck, whatever you do.


----------



## peterk

^ Second what HP said.

eee, at Questrade you can buy ETFs commission free with no minimum purchase amount. I often buy just a hundred dollars worth of XIU or XEG (if you think you can stomache it) when a dividend payment shows up in my account.

Buying ETFs at Questrade is a fantastic way to start out with a small amount of money and minimal experience with a brokerage account where your money won't all get eaten away by commissions.


----------



## 299889

humble_pie said:


> eeehitscody congratulations on saving up these funds & more importantly, for thinking constructively about how you could deploy these savings to enhance the long term situation. These are already accomplishments!


Thank you, I am currently only 17 so theres only so much I can do, I was waiting till I was 18 to start investing and have more capital but at the current oil prices and fear of small recover with the 6 months to my birthday I didnt wanna loose out on a potential small profit I could stand to make if I bought now. unfortunately like you stated with the discount brokers I like the idea but because of my age my parents only agreed to letting me open something with there name attached if it was at a place they knew so I am opening a CIBC Investors Edge account and will be operating out of it until I can further my education and gain more capital and move to a different brokerage.

All the information you gave me will not be wasted but I still would do more information regarding it. I have so much to learn.

As for CPG I wanted to purchase this even with my small fortune so I learn abit and make mistakes (Meaning maybe buying the stock and seeing it go down before it goes up) to help me figure out when the right time is to buy. I do plan on holding these stalks for a while 10+ months at a minimal and within that time Im sure oil will become more stable and the energy sector can go back up. 

Thanks to everyone who gave me information!


----------



## gladaki

This is great forum, you are doing terrific job by posting it here. I learned a lot from people here


----------



## 0xCC

eeehitscody, I will add to the list of people that agree with humble and the general idea that an investor starting out is probably best served using an index/couch potato strategy at least until they have accumulated both experience and portfolio size to the point where some individual stocks might make sense.

Having said that, given that you are only 17 and that you are only looking to invest $1000 (which I understand is a lot for a 17 year old) getting some experience with that $1000 might not be a bad idea. In the worst case it could be a good education and hopefully the education and experience doesn't cost you more than $400-$500 to realize that index investing would have been the more stable way to go.

The thing that you have to understand about this stock is that it is fairly high on the risk scale with oil at these levels. The stock went up yesterday because they announced their capital spending for 2015. In that announcement they outlined how stable they feel their cash flows are and they managed to reassure the market that they won't be cutting their dividend anytime soon.

The issue here is that what is good for the stock today can turn out to be a disaster for the stock in 6 months. If oil prices stay low and CPG finds itself in a position where their best course of action for the long-term stability of the company is to reduce the dividend this stock will be taken out behind the woodshed and shot. The current $25 stock price will look like the mid-$40's stock price of 4-6 months ago. It will not be pretty and if this stock is 80% of your portfolio you will definitely feel the pain. As I said though, if you are willing to take that risk and view a loss like that as the cost of your investing education that doesn't seem unreasonable to me. On the other side, if oil gets back into the $80+ range this stock will likely be back into the $40+ range. Nobody knows if or when oil will go back up though...


----------



## humble_pie

eeehitscody said:


> Thank you, I am currently only 17 so theres only so much I can do, I was waiting till I was 18 to start investing and have more capital but at the current oil prices and fear of small recover with the 6 months to my birthday I didnt wanna loose out on a potential small profit I could stand to make



eecody u are one amazing teen!

cibc broker is good but check out any fees they might have for inactive accounts. You see, if you spend $800 to buy shares but there are no trades for a considerable time after that - within the quarter let's say - most bank brokers will impose an inactive fee on small accounts.

re buying 30 CPG shares & holding these as an experiment from which one would hope to learn market timing ... the probability of success from this single operation could be disappointingly low, alas.

people with larger portfs & longer time frames, as in 2, 3 or 4 years, have extreme difficulty getting market timing to work. Or they might be successful for the biblical seven years, then thoroughly unsuccessful for the next seven.

plus you've mentioned a time frame of only 10 months, which makes the chance of success even more elusive!

what to do? i can see that you feel strongly tempted to take a micro-position, almost in a kind of competition with yourself. I imagine that the standard suggestions - buy an ETF, be prudent, be safe, be boring - sound humdrum to you.

would virtual trading satisfy your hunger for success until you reach your 18th birthday? you could bet on cpg if you wish, although i think it'd be a good idea to put XEG plus a big integrated oil like husky or even exxon into the virtual as well.

in the meantime, you could place your real-life funds in a HISA, one with no exit or withdrawal fees.

stock markets are like bus hubs, there's a good one departing every second. All the opportunities that you don't catch today will still be rolling out after you turn 18. 

i think peterk has a good suggestion re Questrade, perhaps you could discuss with your parents your wish to find a low-cost broker that's OK with small accounts? then, while you wait, you could continue the studies that have obviously given you all the knowledge that you already possess (pretty impressive in a young person.) Best wishes.


----------



## OptsyEagle

eeehitscody

I will add some advice for you to take or leave as you please. You will always do better if you lean on your strengths and not your weaknesses. As I see it, you have at your disposal one huge advantage over just about everyone on this board and of course a fairly large disadvantage. 

Your disadvantage is your experience. Most likely your experience with investments will be significantly less then the person's experience, who is selling you their shares. This does not guarantee failure, since luck plays the primary role in this game (stock picking), but it should make you wonder WHY, if this CPG opportunity is go great, that they would be willing to sell it to you, at this time and at this price. Are you sure that you are smarter then they are?

Your advantage is obvious. You are probably younger then almost anyone on this board. I am sure you are eager to get rich quickly, as is everyone, but eagerness will not make it happen. If I were you, I would harness the power of compound interest. Find an investment that you know will make a safe but steady rate of return, like a bank stock, or an index ETF and just forget about the darn thing until it becomes humungous, with time.

That $1,000 you are about to lose on an energy stock, is easily $1,000,000 out of your retirement fund, when compound interest is taken into account.

Just my 2 cents. Good luck to you.


----------



## Toronto.gal

OptsyEagle said:


> eeehitscody
> 
> Your disadvantage is your experience/This does not guarantee failure, since luck plays the primary role in this game/I am sure you are eager to get rich quickly, as is everyone, *but eagerness will not make it happen.*


That's exactly what I hear, 'eagerness', but at this point, given your 'disadvantage', it should be directed at learning rather than trading.

You're only 17, so congrats on being interested in investing, but you should not be in such a hurry to buy before you learn. There are always opportunities & good stocks on sale; 6 months will not matter much in the overall scheme of things. You're probably too young to remember the crash of 2008/2009, but today many stocks are at same levels.

Why not just focus on school, save until you can open a TFSA account at 18, and use that 1/2 year to learn about investing? How much do you know at this point, have you read any books? 

You could get lucky and make a 50% or even 100% return on that $1K, and then you would think 'this is easy', and next time you could lose it all.


----------



## 299889

Toronto.gal said:


> Why not just focus on school, save until you can open a TFSA account at 18, and use that 1/2 year to learn about investing? How much do you know at this point, have you read any books?
> 
> You could get lucky and make a 50% or even 100% return on that $1K, and then you would think 'this is easy', and next time you could lose it all.


Toronto.Gal,

I have read several books, on different subjects ranging from the typical wealthy barber to micro and macro economics, I have been taking a course in High school called "Financial securities" To get a better knowledge on subjects such as investing or taxes. 

As for the TFSA I will be opening an account when I turn 18 with another pool of savings I have stored in a typical savings account at the bank.

The 1k I plan on investing is money from Random things, I have been smart about my saving and have saved every toonie and loonie I have gotten over the last two years (Not much but something) and all other loose change and have acquired approx. $300 in change with I cashed in at TD, Also I sold some various things to friends and on Kiiji such as paintball guns and old dirt bike riding boots that were no longer used and I could get a bit more for that. All in all the money I plan on spending on a stock like CPG is "disposable" I do not have any expenses of my own because of my age and decided to have alittle "Fun" with my own money.

CPG seems like a good option to me, they have not publicly announced any cutbacks to the dividend and that was one of the interesting factors as to why I picked the stock having an annual return of just under $3 and I liked the appeal of that and getting a monthly dividend that has been reliable (Since late 2009) As you said about the fall in 2008/2009 if a company that went through that and then started paying out a dividend It seems like it'll make it through this. 

I appreciate everyone for everything they've said and Ive already learned from my first few posts.


----------



## Chris L

From what I read, I'd say go ahead and do it. Having some skin in the game will help you learn a lot faster. But that said, don't do it often and don't use money you don't plan to kiss goodbye - even if you start winning. 1k is hardly anything in the grandscheme of things. Also, you are highly unlikely to lose it all, or even half of it at this point as we're nearing the bottom on most. Why CPG rather than SU or HSE? Why not BTE or COS. Think about that, then make your BET. I see no harm in it. You've got an entire adulthood to correct any mistakes you make today.


----------



## hboy43

OptsyEagle said:


> That $1,000 you are about to lose on an energy stock, is easily $1,000,000 out of your retirement fund, when compound interest is taken into account.


Sigh, over 3 hours has gone by and nobody else noticed this piece of nonsense? Sure I am a numbers guy by training, but still! If I noticed it before even finishing reading the sentence surely a few others should have in under a minute.

To the OP: if you cannot put numbers to my observation above, then you are too soon to investing.

hboy43


----------



## OptsyEagle

hboy43. You caught that extra zero. In my defense, I never said when he would be able to retire. lol.

One thing that is true, however, is that he has a lot more compounding years ahead of him then the rest of us. He can simply use time to make the lion's share of his money, where the rest of us need money to do it, since we are running out of time. 

You don't want to turn 50 when you figure this out.


----------



## peterk

^



OptsyEagle said:


> That $1,000 you are about to lose on an energy stock, is easily $1,000,000 out of your retirement fund, when compound interest is taken into account.


That's only 15%/year for 48 years. Completely doable. :biggrin:


----------



## Toronto.gal

hboy43 said:


> Sigh, over 3 hours has gone by and nobody else noticed this piece of nonsense?


That was an obvious typo, or maybe he wanted Cody to have noticed it. 

Cody, you might be ready to read The Intelligent Investor [if you haven't done so already]. You sure don't sound like a typical 17 year old!

Good luck!

Edit: *Chris L:* if by unlikely 'to lose it all' you were quoting me, I did not mean he could lose all in CPG. When people sell, they often buy a different stock, that is what I meant.


----------



## OurBigFatWallet

Personally if it was me I would go the ETF route for the reasons mentioned above. I use Questrade to buy ETFs and it's nice to not have to worry about getting dinged a commission for every purchase. More diverse and lower cost than one stock, plus you can dollar cost average for less with no commissions.

But if I was stuck on putting $1,000 into stock I'd probably go 1/3 CPG, 1/3 another oil and gas co, and 1/3 something in another industry 

As far as CPG's divvy, it's been reliable since well before 2009 including a couple increases. I believe their website has a full history.

Whatever you end up doing, best of luck


----------



## hboy43

OptsyEagle said:


> hboy43. You caught that extra zero.


Fair enough.

Sorry for coming across a little grumpy, must be all the shivering. I can't quite do a delta T of 45C with my two wood stoves.

I guess my point is that all up and down the internet for months now I have been reading that everyone is all of a sudden able to predict a bottom to oil prices etc. when the very same people were completely blind to the soon to be unfolding events back in the summer: pundits, comments in the newspapers, here. Why are these people all not billionaires now? Then something that is entirely tractable and obvious is missed.

So my advice to the OP in regard to investing is to know and understand what it is possible to know and understand: investing formulae, taxation issues, investing expense issues, investing psychology, investing product categories, insurance needs, understanding yourself etc. Guessing on the future price of one stock does not fall into this category.

hboy43


----------



## Pluto

OptsyEagle said:


> eeehitscody
> 
> I will add some advice for you to take or leave as you please. You will always do better if you lean on your strengths and not your weaknesses. As I see it, you have at your disposal one huge advantage over just about everyone on this board and of course a fairly large disadvantage.
> 
> Your disadvantage is your experience. Most likely your experience with investments will be significantly less then the person's experience, who is selling you their shares. This does not guarantee failure, since luck plays the primary role in this game (stock picking), but it should make you wonder WHY, if this CPG opportunity is go great, that they would be willing to sell it to you, at this time and at this price. Are you sure that you are smarter then they are?
> 
> Your advantage is obvious. You are probably younger then almost anyone on this board. I am sure you are eager to get rich quickly, as is everyone, but eagerness will not make it happen. If I were you, I would harness the power of compound interest. Find an investment that you know will make a safe but steady rate of return, like a bank stock, or an index ETF and just forget about the darn thing until it becomes humungous, with time.
> 
> That $1,000 you are about to lose on an energy stock, is easily $1,000,000 out of your retirement fund, when compound interest is taken into account.
> 
> Just my 2 cents. Good luck to you.


OptsyEagle, here you go again with your convoluted perspective. 

A) you again tout that everything is luck/random Therefore you can't predict. 
But then,
B) you make a prediction that he will lose his 1000.

So what is it? A or B? Make up your mind. If everything is luck/random you can't make the prediction B. Don't you get that? 

You have admitted previously that you are a poor stock picker. And you generalize from your own experience to everyone's experience. Doesn't it occur to you that the sample you generalize from is a little small, and therefore probably invalid? You are confused. 

Underlying your 2 cents worth is projecting the recent past into the future - in other words oil and oil socks have gone down, therefore they will continue to go down, therefore eeehitscody will lose his $1000. That's baloney. And it is plain as day it is baloney. It is plain as day, oil is cyclical and the world is willy nilly dependant on the stuff. So your projections into the future are false. 

Here we have this young individual who is most defiantly on the right track, and you muddy the waters with your convoluted perspective. eeehitscody is on the right track because looking at oil is opposite to the crowd and daring to buy when most are fearful. 

I'd be happier if something a bit more conservative was on eeehitscody's radar, but CPG isn't all that bad. I say buy it on weakness and hang on until you like oil stocks, then think about selling some because by that time all the easy money will be made.


----------



## OptsyEagle

Pluto, I thought we stopped with this unwinnable debate. You always list a whole bunch of things that you think I say and since I didn't say it, it gets quite difficult to argue. Let's just leave it alone.

I am just trying to help the kid. If you disagree, fine, but lets not make it personal.


----------



## 299889

CPG up almost $3 since Tuesday, anyone get in on Tuesday and make a small profit already?


----------



## Chris L

eeehitscody said:


> CPG up almost $3 since Tuesday, anyone get in on Tuesday and make a small profit already?


CPG is up because it inspired confidence in it's report. I doesn't have much on details. It could have gone either way and still might. Oil isn't moving right now as it seems to be stuck at the $50 psych level. I'm still giving you some room to explore a position on something and make a bet  Others here aren't....

http://business.financialpost.com/2...rp-cuts-capital-budget-by-28-to-1-45-billion/


----------



## fatcat

this kind of talk is going to attract investors and inspire confidence i should think ...



> “We would drill these projects all the way down to $20 WTI,” Mr. Saxberg said in a telephone interview. He added that Crescent Point’s two main areas of focus in Saskatchewan had the best returns in North America, so, “if we’re not drilling, nobody in North America would be drilling.”


lately i am inclined to think that i should sell SU and buy CPG, at least i am getting more well paid for the risk, which though SU has held up better than CPG is probably not offset by total returns


----------



## Chris L

fatcat said:


> lately i am inclined to think that i should sell SU and buy CPG, at least i am getting more well paid for the risk, which though SU has held up better than CPG is probably not offset by total returns


If you want some upswing SU doesn't seem to fit the bill. I've been looking at it, but it hasn't suffered. It's stable, but with it comes little opportunity.

You might have missed the boat on the easy CPG, but looks like it will continue to recover...but who knows.

What others are depressed as much as COS? Most are showing signs of capitulation. I'm look at CVE....low cost of oil production....so could remain safe no matter what.

Sitting on my hands for now.


----------



## fatcat

Chris L said:


> If you want some upswing SU doesn't seem to fit the bill. I've been looking at it, but it hasn't suffered. It's stable, but with it comes little opportunity.
> 
> You might have missed the boat on the easy CPG, but looks like it will continue to recover...but who knows.
> 
> What others are depressed as much as COS? Most are showing signs of capitulation. I'm look at CVE....low cost of oil production....so could remain safe no matter what.
> 
> Sitting on my hands for now.


as far as i can tell from a cursory reading, the others are a little more humble than CPG and more inclined to project caution in contrast to CPG's oversized confidence ... maybe COS is a better buy ? ... i don't know

i am sitting on the sidelines at present but i am thinking that SU brings the worst of both worlds, you still take on significant risk based on the commodities price but don't get much in the way of returns based on yield ... who knows ? ... it feels like we are all standing at the roulette wheel on this one

is there a metric called an "oil risk coefficient" that can be applied to these companies so we can measure total return against risk ?

i would love to see SU vs CPG


----------



## Killer Z

fatcat said:


> as far as i can tell from a cursory reading, the others are a little more humble than CPG and more inclined to project caution in contrast to CPG's oversized confidence ... maybe COS is a better buy ? ... i don't know
> 
> i am sitting on the sidelines at present but i am thinking that SU brings the worst of both worlds, you still take on significant risk based on the commodities price but don't get much in the way of returns based on yield ... who knows ? ... it feels like we are all standing at the roulette wheel on this one
> 
> is there a metric called an "oil risk coefficient" that can be applied to these companies so we can measure total return against risk ?
> 
> i would love to see SU vs CPG


The nice thing about SU and CPG is that the chance of a dividend cut is slim, thus you will still get paid while you wait ......which is important because the wait could be a significant one.


----------



## Jon_Snow

Killer Z said:


> The nice thing about SU and CPG is that the chance of a dividend cut is slim, thus you will still get paid while you wait ......which is important because the wait could be a significant one.


This. Hold considerable amounts of both will continue to hold them gladly.


----------



## Moneytoo

eeehitscody said:


> CPG up almost $3 since Tuesday, anyone get in on Tuesday and make a small profit already?


I got in on Monday, but because I added to existing position - no profit for me yet, just brought the average cost down to under $36 (and have enough shares now to DRIP one share a month up to $39 )

Don't have SU, somehow liked Husky more (and still do - bought 100 shares in August, they DRIPed 2 more already - hoping the share price will stay under $30 for a couple of years so I can keep DRIPing )


----------



## yyz

Chris L said:


> CPG is up because it inspired confidence in it's report. I doesn't have much on details. It could have gone either way and still might. Oil isn't moving right now as it seems to be stuck at the $50 psych level. I'm still giving you some room to explore a position on something and make a bet  Others here aren't....
> 
> http://business.financialpost.com/2...rp-cuts-capital-budget-by-28-to-1-45-billion/


The stock was also up today on an upgrade from Barclays 
Crescent Point Energy Corp : Barclays cuts price target to C$31 from C$40 
* Crescent Point Energy Corp : Barclays raises to overweight from equal weight




eeehitscody said:


> CPG up almost $3 since Tuesday, anyone get in on Tuesday and make a small profit already?


Yes I added 400 shares on Monday at $25 to one of my existing positions.


----------



## 0xCC

0xCC said:


> My limit order went though this morning, increased my position by 25% at $22.48. As I said I would be ok with this stock at this level even if the dividend was cut by 50%. As of this morning's trade CPG now accounts for 4.6% of my portfolio's annual income.





eeehitscody said:


> CPG up almost $3 since Tuesday, anyone get in on Tuesday and make a small profit already?


My quote from above is from December 10, so much longer than this week but I also got in a couple bucks lower. I do have to point out that I also got in around $43 back in the late spring/early summer when they did that round of financing. That was for the same number of shares that I bought last month so between those two trades my average cost is around $32 so I am underwater on those two trades combined.


----------



## Pluto

OptsyEagle said:


> Pluto, I thought we stopped with this unwinnable debate. You always list a whole bunch of things that you think I say and since I didn't say it, it gets quite difficult to argue. Let's just leave it alone.
> 
> I am just trying to help the kid. If you disagree, fine, but lets not make it personal.


Nothing personal, OptsyEagle. I believe that in your mind you are trying to help. I'm trying to help too by trying to make sense out of your sudden ability to predict he will lose money. I accept the fact that you believe everything in stocks is random and therefore everything is based on luck. But now, out of the blue you are predicting. How does the predicting relate to the theory that everything is luck? How do you get the ability to predict what you claim is random events? 

You see, you seem to have a new theory alongside your luck theory. Your new theory seems to be that oil stocks will continue to go down until everyone who owns oil stocks has lost money. But, since everything is luck/random, how could you know that? 

Nothing personal, just trying to help.


----------



## OptsyEagle

You really like to argue. Unfortuneately you always miss the point I am making and the argument ends up moving in the direction of pages and pages of clarifications. I wouldn't mind so much if I thought one of us could end up proving our ultimate point, but we can't. 

I will add one clarification to your comments, in that nothing in my arguments have much to do with my personal investment results. You made up that comment and then proceeded to anchor your argument on it. Please don't do that. It is not fair to the readers.

Of course, I cannot predict he or anyone will lose money in anything they do. My wording was simply to make a point that there can be a cost to what this person is doing. With his skill level, it is most likely (but not certain) he will lose money on either this investment or if he is lucky enough to succeed, his next one. I can't say what you think about it, but I would think most reasonable people would agree that if a 17 year old teenager, with the knowledge this one has shown, makes money in a stock, it would be almost entirely due to luck. Since everyone's luck eventually runs out, I made the comment that he will lose this $1,000. Either on this investment, or the ones that come next. I believe Toronto.gal explained this point earlier and I couldn't agree more.

Maybe I will be wrong. In the worst case it will be a lesson learned, that is probably worth more then $1,000, and I suspect he will inevitably move in that direction anyway...no matter what I say. I know I would have ignored me when I was 17.


----------



## Toronto.gal

OptsyEagle said:


> Since everyone's luck eventually runs out, I made the comment that he will lose this $1,000. *Either on this investment, or the ones that come next*. I believe Toronto.gal explained this point earlier and I couldn't agree more.


Yes, it's exactly what I meant. 
http://canadianmoneyforum.com/showthread.php/31801-Titan-Medical-Inc-(TSE-TMD)


----------



## Pluto

OptsyEagle said:


> With his skill level, it is most likely (but not certain) he will lose money on either this investment or if he is lucky enough to succeed, his next one. I can't say what you think about it, but I would think most reasonable people would agree that if a 17 year old teenager, with the knowledge this one has shown, makes money in a stock, it would be almost entirely due to luck.
> 
> .


With that claim you are appealing to skill as a way to improve ones performance. Nice to see that for a change. Now if you identify one or more skills that could help the teen, you may contribute to their ultimate success instead of just being negative and cynical. So, since you mentioned skill level, precisely what skill do you think the teen needs to avoid losing the $1000? What skills do you employ to help you not lose money?


----------



## OptsyEagle

I have already told him my suggestions, as have many others, and as have you. Good luck to him.

Let's let this discussion go back to CPG. I believe that is the thread we are on.


----------



## ashin1

this could either be a stupid move or a genius move, bold and gutsy none the less
but I plan to use up my entire TFSA contribution for 2015 to purchase CPG and DRIP it. ($5.5k)
I guess I'm going to be greedy when everyone else is fearful.
There will always be risks when playing in the market, but sometimes you gotta risk it for the biscuit


----------



## AltaRed

It is not a bad bet IF you are prepared to hold through thick and thin. CPG does have good hedges in place especially in the first half of 2015 and a competitive breakeven cost so it will/should survive after many have disappeared. But there could be more pain in the interim, especially in the last half of this year, if oil prices do not improve materially.


----------



## Chris L

AltaRed said:


> It is not a bad bet IF you are prepared to hold through thick and thin. CPG does have good hedges in place especially in the first half of 2015 and a competitive breakeven cost so it will/should survive after many have disappeared. But there could be more pain in the interim, especially in the last half of this year, if oil prices do not improve materially.


What's their breakeven?


----------



## AltaRed

You would have to look at the latest financials but at 3Q14 prices, it is somewhere in the $30-35 range over their full operation (depending on assumptions on oil selling price and hence royalties), including G&A and Interest, but excluding dividends, capex, etc. It is definitely lower than oil sands producers and I suspect they could selectively cut out any high(er) cost production if they had too.


----------



## OptsyEagle

Chris, the more important question isn't the break even for profitability, but the break even point required before they see the need to cut the dividend. I have fairly little doubt that CPG could weather a prolonged downturn in oil prices, like we have seen. I am just not so convinced that the current share price discounts the probabilities that could lead to a dividend cut and then the corresponding losses that a shareholder will take, if that cut should happen.

You see, the oil hedges are great, however, in my opinion, the share price is currently supported by those hedges. But those hedges have a time limit to them. Even though many of them go out for a year or more, I suspect that sometime around the end of the 1st quarter of 2015, the stock market will start re-calculating things and, in my assessment, if you take away a lot of those hedges, things get considerably uglier, with respect to dividend sustainability. Therefore, whether CPG cuts the dividend or not, in this new environment, where CPG has less hedges, you will see that the stock will start to trade downwards, if oil prices stay where they are or go lower by around the end of March. Make note that none of what I said has anything to do with CPG cutting a dividend by that time. It is simply from the passage of time, with no increase in the price of oil. Of course all this is just my opinion.

Lastly, do not be fooled by this managements public support of their current dividend policy. If you go back and look at all the companies in the past, that have ever cut a dividend, management was always telling the public market that the dividend was safe and supportable, right up to the day they cut it, in the vast majority of the cases. This is NOT because, those managers were unethical or trying to take advantage of shareholders. It is because, in today's world, of quickly disseminated information, for a CEO/CFO to give any indication at all that their dividend was at risk, the response in the stock market would be pretty much the same as if they had already cut it. Since the price of their stock can determine their their ability to acquire capital in the future, this can create a huge problem, not only to their future business, but to the sustainability of the dividend itself. Therefore, very few executives would ever say "we are a little worried about the dividend" or " there is some concern over our dividend". That stuff might be buried in the written news releases but is usually glossed over with words showing overwhelming safety and support. Again, right up until it is cut.

Anyway. You should try to avoid asking someone else "where is the breakeven". You really should figure it out for yourself. Also, I am not saying an investor will not make a good return from buying CPG on Monday or ever miss a dividend going forward. I am just saying that I am so cheap, that this stock will need to sell a lot cheaper before I would buy it, when oil prices are where they currently are. It doesn't have the margin of safety. Again, all my opinion.


----------



## AltaRed

OptsyEagle said:


> Anyway. You should try to avoid asking someone else "where is the breakeven". You really should figure it out for yourself.


I agree. FWIW, I went straight to 3Q14 results and got a quick calc of $30-35 (mostly to confirm the hunch I had). Once I found the 3Q results, I spent no more than 5 minutes to come up with that number (approximation). I just took the obvious cash cost items and did not look into the bowels of the financials.


----------



## Chris L

Thanks. You're right.


----------



## Valueinvestor

TSE down 100 points today and CPG is up 6%. Hmmm......granted oil is up today but still


----------



## 299889

Do you see this stock going down anytime? around the ~25 dollar range? or has it hit bottom and this is the rebound?


----------



## My Own Advisor

I personally think we've seen the floor for CPG but then again, I was wrong about COS going under $8!


----------



## OptsyEagle

eeehitscody said:


> Do you see this stock going down anytime? around the ~25 dollar range? or has it hit bottom and this is the rebound?


Just a little more advice cody. No one has the ability to answer that question. 

For the most part, if an investor owns the stock, they will always feel it is undervalued and going up (if they didn't they would have taken the 3 minutes it takes to sell it already). If an investor is waiting for a better price or short, they will have an opposite feeling, however, none of them can know for sure...at least in the short term, which direction it will go.

To prove my point, just open two windows on your browser. In the first window, plot a chart of CPG, showing all its ups and downs over the last 2 years. In the second window, go back and read all of the 30 pages of this thread, over the more then 2 years of time it spans, to see the forecasting powers of the posters on this website.

No offense to them. They were just not endowed with the god like powers you are technically asking for.


----------



## humble_pie

OptsyEagle said:


> ... just open two windows on your browser. In the first window, plot a chart of CPG, showing all its ups and downs over the last 2 years. In the second window, go back and read all of the 30 pages of this thread, over the more then 2 years of time it spans, to see the forecasting powers of the posters on this website




well, no. Some didn't bother to forecast. They held a good dividend payor, they sold options, they collected plenty $$ through thick & thin, they'll be fine eventually when cyclical O & G recovers.

the only potential kick in the can is that this well-managed company could go bust. But in such a broken world Optsy is surely also going to suffer bad, no matter what he holds each:


----------



## Pluto

eeehitscody,

Its true that no one can know in advance with precision where oil will bottom, and if cpg will go back to 25. The lack of such knowledge can contribute to fearful inaction and that's bad. It can also contribute to cynicism, and waiting too long to get in at a good price. so here is how you can do this successfully.

1. When a crash or bear market comes, such as we are having in oil, use fundamental analysis to determine which companies will survive. Then,
2. Use technical analysis to tell you when to buy. For example, with cpg pull up a chart on yahoo finance. Configure it to a log scale. Under the indicators tab click RSI. When the RSI is at a value below 20, that's a good buy point. When an industry starts to plunge, its important to have your fundamentals done, and your target buy companies already decided. then watch the charts. When RSI gets into buy territory, buy, especially on a day where the stock is taking a pounding. 

By using these methods, I bought HSE and CPG. I'm well into the profit zone. Up 15% + on cpg, and 12%+ on hse. I didn't get the absolute best price, but I'm close enough to make me happy. 

Also on the chart you will notice that on the way down, the price decline steepened/accelerated and there was higher volume at that time. Those facts suggest fear is intensifying, and the fearful are leaving in large numbers. The idea is that the price will bottom when most of the fearful have sold, and you want to buy when fear is high. High fear = low price. 

Critics will say that the RSI does not prove that is the absolute bottom, and they are right. Even so, when you look at the chart, you will notice a v shaped bottom. RSI helps to buy near the bottom of that v. That's what you want, so even if it does go lower after a rebound, at least you didn't buy the top of the rebound, and you may be able to buy more at the next v bottom. This only works on sound survivors. Never use this on companies with shaky fundamentals. 

Critics will tell you you will lose all your money and to run along out of here and just put your money in the bank. They don't have the predictive powers they claim. Later, after prices recover, and oil prices are higher, the critics will feel safe, and tell you to buy then after the opportunity is lost. such critics feel safest just before a crash, and most fearful at the bottom when the best prices are available. Its best to learn to ignore them. Study the methods of the greatest investors. One of my favorites is Templeton. Buy at the time of maximum pessimism he said. The charts, as I have explained, can help you identify maximum pessimism - ie, a steepening high volume decline, and an RSI < 20. This only works on survivors that clearly will not be in danger of bankruptcy.


----------



## OptsyEagle

humble_pie said:


> But in such a broken world Optsy is surely also going to suffer bad, no matter what he holds


I really don't understand the need to make a post personal. What in the world does me making money or losing money have to do with the question this kid asked or the answer I gave or where CPG might trade.


----------



## Pluto

OptsyEagle, As far as I can tell, she is only repeating what you already said yourself. Unless I am mistaken, part of your perspective is everyone who buys individual stocks is going to lose. You are part of "everyone".


----------



## OptsyEagle

Well, I did not say that exactly. I just said that a person would be as well off buying an index as beating to death the attempt to outperform via individual stock selection, except for a few lucky exceptions. Again that is my opinion.

But what does my losing money in a broken world have to do with the question. I have no doubt that if the stock market goes down, I am going to lose some money. I just don't understand what it has to do with the question ... except to possibly discredit my opinions. If a poster doesn't agree with my opinions, then simply state their own and I would assume if done correctly the discredit of mine would happen all on its own. It just seems like a more mature way to do it.

Perhaps I misunderstood HP's point. If I did, I apologize.


----------



## humble_pie

OptsyEagle said:


> I really don't understand the need to make a post personal. What in the world does me making money or losing money have to do with the question this kid asked or the answer I gave or where CPG might trade.




nothing personal at all, nothing personal whatsoever.

i could have said that "anyone" & "everyone" who scathingly mocks the well-known cmf forum holders of CPG in such derogatory terms is, in an avowedly broken & collapsing market, probably going to suffer as well. Nor does he understand the longterm strategy of these energy investors in the slightest.

i'd be happy to amend my message to remove your name if this would please you.

as to your insistences that you are "advising" or "helping" "the kid," it is yourself more than anyone else who has slagged this young man's lack of experience often enough. Par contre, several parties on here including myself have encouraged his marvellous enthusiasm, meanwhile attempting to flag safer investment approaches in mild language.


----------



## OptsyEagle

The comment about the 32 pages of posts was not intended to insult anyone but simply to show that the posters, on average have no forecasting ability, at least in the short term, when it comes to this stock. I am sure there is an exception in those 32 pages but that exception would most likely only be found when looking back at them...and would be an exception.

As for the kid or anyone else who may not like my opinions, they are free to disregard them. They were given with good intentions. I certainly don't want to insult anyone on here, but a person only has the experience that they have. I cannot change that. I was just pointing it out and trying to add some advice. If it indirectly reduced his enthusiasm, then I am sorry for that since it was not my intent. As you are aware, enthusiasm alone will not bring success but it is a good starting point if proper learning and advice is taken along with it.

Anyway, if you don't like my opinions, please contradict them. Adding a comment like you did was not the proper way. Again, just my opinion.


----------



## Pluto

some are trying to help eeehitscody be and exception. And there you were scaring him away from a good buying opportunity. Also I'm trying to help you be an exception too, but you are very resistant. You keep harping on how poor forecasters are. We all know that forecasting is a mugs game. In order for you to improve your investing, you have to get beyond criticizing forecasters. This is an invitation for you to move up to a higher level. Look at some posts by blin10: he nailed the bottom on HSE. He did some trading and nailed a 20% gain in the blink of an eye while you and others are wasting energy criticizing forecasters and promoting cynicism. If you were giving good advice, eeehitscody might be a happy camper with a decent buy on cpg. Instead you teach this young individual to be fearful when everyone is fearful - the exact wrong thing to do - you teach him to be a crowd follower. If you look at post 312 and pull up the chart and study it, you might clue into what I am talking about - in a crash type situation as this you buy a sound company around the time the bulk of the fearful have sold. And they way you estimate that is by looking at price and volume charts during the crash.


----------



## Chris L

There's worse a young kid could do with $1k, I say. I gave him the go-ahead for the record. Now, might be too late for the quick gain. But he's learned a lesson and it only cost him an opportunity. I think you bought some bank stock (another thread). So that might turn out okay for him too. Picking things up when they are cheap is what it's all about.


----------



## Pluto

I sold all my bank stock last fall. Not interested in Can Banks yet. Anyway, I get the feeling eeehitscody is going to develop into a fine successful investor.


----------



## OptsyEagle

Pluto said:


> some are trying to help eeehitscody be and exception. And there you were scaring him away from a good buying opportunity. Also I'm trying to help you be an exception too, but you are very resistant.


I suggested that he invest in an index fund. What in the world was wrong with that. Perhaps it was done harshly, in your opinion, but I wanted him to get the point. I do not see the advantage of simply urging him on without some level of guidance. HP was suggesting he look at using stock options. That is like suggesting a guy look into doing trigonometry calculations before he has even learned his multiplication tables. He said he was 17 years old. Do you think perhaps there is a reason why the law prevents him from such "buying opportunites". What would you do if he said he was 15 but wanted to go drive his Dad's Ford F350 down the highway. Encourage him?

Recently he was asking if anyone thought the stock would fall below $25. Do you really think that was a good question? Do you really think that question deserved a straight answer or perhaps he should be guided on the proper questions to ask. That is all I was trying to do, by showing him from the 32 pages of content that no one can answer such a question.

In my opinion,here is an example of someone genuinely trying to learn, the proper way on a public forum:

http://canadianmoneyforum.com/showthread.php/32257-Help-Financial-Statement-Analysis

As for you helping me. Please, save yourself the effort. I don't recall asking for any advice and if I did, I would prefer to take it from someone who has some useful experience. I am getting a little tired of sugar coating with you guys. All I have ever done is disagree with some of your opinions. You really have to learn to deal with that and either re-contradict or ignore it. These cheap personal shots are quite immature.


----------



## Pluto

A good question is any question an individual has. (Sounds to me like you want to micromanage his investing and his questions so he is proper on a public forum. He is already proper on a public forum. Now you are criticizing his questions, which are perfectly legitimate.) 

I recall you telling him to learn about compound interest and not lose his money in the market. that was before he stated he had taken a course in finance, and read one or more books. You assume his level of knowledge based on his age, without even asking. In other words, you didn't asses his knowledge, you just assumed. 

I have no aspirations of helping you. But one never knows, you might learn something. My impression of your investing history is you were, at first, trusting of forecasters. Then you got burned as their forecasts proved wrong. Nothing wrong with that. Then you got into criticizing forecasters. Nothing wrong with that, either, however, you seem to be stuck in that mode. But I think you are going to move on from that and rely on something other than forecasters and spending too much time criticizing them. At that point, you might be a more successful investor. Currently what I see is you being a crowd follower, so at best you will get average results. When you depart from the dominant forecast, you depart from the crowd.


----------



## Toronto.gal

In Cody's 1st & last post, he was not asking for any other advise, other than should he wait or buy the stock with the intent of making a return in less than a year. He received the best/shortest responses to his direct question from MOA/YYZ; most other responses were well intended advise/lecture/opinions that all are entitled to make. 

I didn't hear Cody complain about anything, just the grown-ups are giving the bad example here of not respecting the opinion of others. The teenager seems knowledgeable enough to decide for himself what to listen/ignore.


----------



## Beaver101

Toronto.gal said:


> In Cody's 1st & last post, he was not asking for any other advise, other than should he wait or buy the stock with the intent of making a return in less than a year. He received the best/shortest responses to his direct question from MOA/YYZ; most other responses were well intended advise/lecture/opinions that all are entitled to make.
> 
> I didn't hear Cody complain about anything,* just the grown-ups are giving the bad example here of not respecting the opinion of others. *The teenager seems knowledgeable enough to decide for himself what to listen/ignore.


 ...+1 ... I think Cody is more mature than some of the super-opinionated and arguments-seeking grown-ups here.


----------



## gibor365

> When the RSI is at a value below 20, that's a good buy point. When an industry starts to plunge, its important to have your fundamentals done, and your target buy companies already decided. then watch the charts. When RSI gets into buy territory, buy, especially on a day where the stock is taking a pounding.
> 
> By using these methods, I bought HSE and CPG. I'm well into the profit zone. Up 15% + on cpg, and 12%+ on hse. I didn't get the absolute best price, but I'm close enough to make me happy.


just out of curiosity checked HSE 6 months chart... The only time RSI was below 20, was on Aug when price was $32+ ... I doubt it was best time to buy 

Also, I checked some of my best performing stocks.... if I'd wait for RS! = 20, I'd never buy them.....as they RSI never went below 20


----------



## humble_pie

wondering if the thread could please return to its topic, which is the fate & fortune of crescent point energy.

the thread is long & controversial since CPG has always been an exceptionally controversial company among canadian O & G. The critique always concerns the dividend.

arguably the most cogent nay-sayer has been altaRed, & this because he is a longterm veteran from the heart of the industry, so his views carry enormous weight. Here is a key expression of them, taken from upthread.

http://canadianmoneyforum.com/showt...nergy-(CPG-to)?p=238682&viewfull=1#post238682


CPG has advanced smartly in recent hours & days, enough that the cost base of some longtime holders has already been surpassed.

in the industry at large, though, i for one can't see that the worst can be over yet. Surely there will be writedowns? surely these might devastate resource stocks once again?

it's always the most tricky stocks that are the most interesting to play.


----------



## Pluto

gibor said:


> just out of curiosity checked HSE 6 months chart... The only time RSI was below 20, was on Aug when price was $32+ ... I doubt it was best time to buy
> 
> Also, I checked some of my best performing stocks.... if I'd wait for RS! = 20, I'd never buy them.....as they RSI never went below 20


Well, rsi was below 20 for a few days +/- dec 11. Nomally I don't use rsi. the qualification was in a crash situation. If you look at the words you quoted "when an industry starts to plunge" you get the qualification. I wasn't recomending rsi in a non-crash situation. So I agree - if I'm not looking to buy in a crash situation, I don't use rsi. It is not the be all and end all indicator. thanks for expressing your concern. The fact that rsi was below 20 back in august doesn't concern me be cause it wasn't a crash situation so to me it would be an irrelevant reading. back then I had no interest at all in any oil stocks - sold all my oil long before aug while the industry was flying high.


----------



## Pluto

humble_pie said:


> wondering if the thread could please return to its topic, which is the fate & fortune of crescent point energy.
> 
> the thread is long & controversial since CPG has always been an exceptionally controversial company among canadian O & G. The critique always concerns the dividend.
> 
> arguably the most cogent nay-sayer has been altaRed, & this because he is a longterm veteran from the heart of the industry, so his views carry enormous weight. Here is a key expression of them, taken from upthread.
> 
> http://canadianmoneyforum.com/showt...nergy-(CPG-to)?p=238682&viewfull=1#post238682
> 
> 
> CPG has advanced smartly in recent hours & days, enough that the cost base of some longtime holders has already been surpassed.
> 
> in the industry at large, though, i for one can't see that the worst can be over yet. Surely there will be writedowns? surely these might devastate resource stocks once again?
> 
> it's always the most tricky stocks that are the most interesting to play.


I heard a report on TV that CPG will survive as their cost is in the mid 30's but due your own due diligence and so on. Anyway I'm operating on that assumption, and the assumption that the market for this stock over reacted on the downside. However, you may be quite correct in your concerns - another devastating sell off. After all, oil is being stockpiled in leased tankers and it all has to be sold sometime before this is over, not to mention the possible write downs you mention. (One thing that drives me is the confident words of Templeton - buy at the time of maximum pessimism. Once I had faith in that and started buying (quality survivors) just as it seemed fear was at its most intense, I did a lot better in my investing. I didn't necessarily get the bottom, and often there was a further bottom, but the last bottoms were not that much lower than when I bought.)


----------



## OptsyEagle

I will be glad to behave. I just didn't understand why my opinions were attacked, so aggressively. When I reviewed them again, I have a hard time understanding it, unless someone was out for me specifically, which I suspect is the case.

In any event, my skin is pretty thick. For my transgressions, however, I apologize. 

I don't have a horse in the CPG race so I will leave you guys with this thread. Good luck to you all.


----------



## humble_pie

Pluto said:


> ... After all, oil is being stockpiled in leased tankers and it all has to be sold sometime before this is over




is oil already being stored in tankers lying offshore? i hadn't seen this news, i thought the tanker mentions were just people harking back to the era of the somali pirates, 5-6-7 years ago.

at the time there were definitely lots of pirates in the Gulf. Plenty ship hijackings. High drama. Captain Phillips.

but also at the time, some analysts opined that at least some of the ships were merely being tied up on the cheap, full of oil but with no expensive docking costs, meanwhile with full insurance in place, by hired somali teams who were functioning more as ship babysitters than as pirates ...


----------



## Pluto

Its what I heard, but do you own confirmation. Apparently cheap oil is being bought and stored on tankers @ $60,000 per day with the idea of selling the oil later for a higher price. lol. If so, the folks doing this have a great faith in a price recover fairly soon. incidentally oil futures for approximately 2 years out is in the 67 area. So things are not as bad as the spot price would have us believe. I'm suspecting this is going to all blow over before we know it.


----------



## AltaRed

humble_pie said:


> arguably the most cogent nay-sayer has been altaRed, & this because he is a longterm veteran from the heart of the industry, so his views carry enormous weight. Here is a key expression of them, taken from upthread.
> 
> http://canadianmoneyforum.com/showt...nergy-(CPG-to)?p=238682&viewfull=1#post238682
> 
> 
> CPG has advanced smartly in recent hours & days, enough that the cost base of some longtime holders has already been surpassed.
> 
> in the industry at large, though, i for one can't see that the worst can be over yet. Surely there will be writedowns? surely these might devastate resource stocks once again?


 I had to go back and read that post again. Had a burr under my saddle, eh? 

FWIW, I accept that CPG management is very good at what they do. Clearly their hedging strategy is working very well for them this year, while at the same time recognizing hedging costs money and the longer and higher the hedge price, the more it costs out of cash flow. 

What I don't know is how well their highly aggressive acquisition strategy is going to work out for them longer term. "Accretion" is a very elusive concept that is only proven in hindsight. I'd like to see some earnings show up AND I would like to see a double digit ROE show up. Until that happens, we are relying on management's confident words.

The biggest issue I have with them is the outsized dilution of shareholder equity over the years, albeit mostly to fund acquisitions, but of more concern, also to pay for DRIPs and corporate compensation. If a company does not buy back enough shares each year to pay for DRIPs and options, they are diluting the shareholder with their own money. It has kept their balance sheet in great shape but at what price?

You make relevant points on the unknowns going forward. I don't think the worst is over yet, 4Q and 1Q earnings yet to come with a number of surprises. I believe there will be reserve writedowns to some degree across the board and beware the companies that have very little writedowns. There will be another round of stock price hits but it will vary greatly among the companies.


----------



## humble_pie

possibly before we know it each:

er ... would you know _where_ those $60,000/day ships are lying?

i don't mean anyone should hijack em, i just think the geopolitics would be fascinating. Like, are those ships beholden to western shipowners/oilcos? or perhaps to ISIL? whose oil exactly is floating offshore these days?


----------



## HaroldCrump

In *this following interview*, Dennis Gartman describes the hoarding of oil using tankers, and how the stocks of tanker manufacturers spiked recently.
Starting from minute 5:20.

P.S. I personally haven't verified any of this information, or looked into the stocks that supposedly spiked.


----------



## yyz

Dennis Gartman is a fool,he changes his mind weekly depending on which way the markets are headed. He's probably busy buying oil in Yen with hedges in swiss francs as we speak.

You mean like this?

http://canadianmoneyforum.com/showthread.php/8477-Canadian-Oil-Sands-(COS)?p=504977#post504977


----------



## humble_pie

(small voice) ... but a tanker started today in the shipyard could hardly be expected to launch until 2018 or so?


----------



## humble_pie

AltaRed said:


> I had to go back and read that post again. Had a burr under my saddle, eh?
> 
> FWIW, I accept that CPG management is very good at what they do. Clearly their hedging strategy is working very well for them this year, while at the same time recognizing hedging costs money and the longer and higher the hedge price, the more it costs out of cash flow.
> 
> What I don't know is how well their highly aggressive acquisition strategy is going to work out for them longer term. "Accretion" is a very elusive concept that is only proven in hindsight. I'd like to see some earnings show up AND I would like to see a double digit ROE show up. Until that happens, we are relying on management's confident words.
> 
> The biggest issue I have with them is the outsized dilution of shareholder equity over the years, albeit mostly to fund acquisitions, but of more concern, also to pay for DRIPs and corporate compensation. If a company does not buy back enough shares each year to pay for DRIPs and options, they are diluting the shareholder with their own money. It has kept their balance sheet in great shape but at what price?
> 
> You make relevant points on the unknowns going forward. I don't think the worst is over yet, 4Q and 1Q earnings yet to come with a number of surprises. I believe there will be reserve writedowns to some degree across the board and beware the companies that have very little writedowns. There will be another round of stock price hits but it will vary greatly among the companies.




it's this counterpoint that has made the CPG thread so valuable for me & undoubtedly for many others. Everyone, no matter their views on O & G, should keep your cautions in mind at all times.

what i did in november was build a mildly bullish option bridge locking in several proxies for CPG & going far forward in time. In one case, until 2017 even! so there is plenty of time to rebuild my crescent point position, or another position based on the proxies, if the market should stabilize or rise.

then in late december i sold 3000 shares for a welcome tax loss.


----------



## fatcat

yyz said:


> Dennis Gartman is a fool,he changes his mind weekly depending on which way the markets are headed. He's probably busy buying oil in Yen with hedges in swiss francs as we speak.
> 
> You mean like this?
> 
> http://canadianmoneyforum.com/showthread.php/8477-Canadian-Oil-Sands-(COS)?p=504977#post504977


+1 from me

https://wealthcop.com/dennis-gartman-etfs-terminated-back-to-peddling-newsletter/

http://www.theglobeandmail.com/glob...cost-investors-a-lot-of-money/article8797031/

who needs oil ? ... we just need to hook a hose up to his mouth and we can heat all of downtown toronto purely on hot air


----------



## HaroldCrump

As I said, I have not followed through this information to validate it.
This idea (i.e. tankers full of crude oil) has been in the media a lot lately.
I believe I originally saw it on Zero Hedge, and soon it was picked up, spiced up, and recycled in blogosphere.
This interview is the only in-person account I have seen.

This could be just another sexed-up rumor like the ISIS selling $6M worth of crude oil to Turkey every day.


----------



## humble_pie

HaroldCrump said:


> This [tanker storage] could be just another sexed-up rumor like the ISIS selling $6M worth of crude oil to Turkey every day.


totally off-topic now. I've never believed the so-called ISIL fortune gained from selling oil through turkey.

afaik there were only 2 pipelines, one old one transporting gas from syria through turkey, the other also ancient but recently refurbished to carry oil from kurdistan through turkey to a turkish port.

i glimpsed a video that was its own caricature. A slow-speaking US official telling the camera with a deadpan face that the turkish border guards were "quietly looking the other way" whenever an ISIL vehicle loaded with oil stops at the border. "Looking the other way" as if said vehicle were a single land rover with a few bags of diamonds or drugs hidden on board.

in reality, oil would be transported in convoys of tanker trucks & western radar intelligence would have picked these up. That they didn't implies that there were no such convoys.

Genel is the name of the british oil company that, only a year or so ago, had succeeded in beginning to transport its oil from kurdistan through turkey via the refurbished pipeline. Prior to that Genel had been ferrying oil north from kurdistan by truck.


----------



## HaroldCrump

Somehow the ISIL trafficking oil story died a natural death last fall as the price of oil started slipping.
Haven't heard anything in a while...

If the oil is free to them, they should be transporting more, not less, as the price is dropping.
I suspect this tankers-full-of-oil story will gradually fizzle out as & when the price of oil starts moving up (whenever that is).

As for the stocks of tanker companies spiking up 50% - 100%, that could be a self-fulfilling prophesy.


----------



## Spudd

No idea about the truth or lack thereof, but here's CBC's coverage of the oil tankers story:
http://www.cbc.ca/news/business/oil-tanker-demand-booms-as-traders-wait-out-cheap-oil-1.2900556


----------



## humble_pie

Spudd said:


> No idea about the truth or lack thereof, but here's CBC's coverage of the oil tankers story:
> http://www.cbc.ca/news/business/oil-tanker-demand-booms-as-traders-wait-out-cheap-oil-1.2900556




excellent article, thankx. Solid sources + some good hard facts.

wondering why Cushing is only half full though? it's odd, right now is mid-january, the polar vortex envelops the continent & companies are all getting ready to order for spring manufacturing & increased driving. Theoretically times such as these should be turning somewhat bullish for oil?

obviously oil futures don't work like options - as Argonaut has told us - otherwise i'd be puzzled by the contango risk. Say spot oil is $42 but feb oil is $45. Speculator sells feb future, fills a sea-going tanker & waits.

in options, there'd be the huge risk that oil would drop to, say, $38 by feb, leaving our friend with a loss. In options, he would have had to buy a february put.

as Argo said, it must be that oil futures are different.


----------



## KaeJS

Anyone a buyer?

Wouldn't management be stupid to cut the dividend? I mean... if you were on the board of directors, would you want to lose millions or would you rather just keep issuing new stock?

I feel like if they were going to cut the dividend it would have happened already...


----------



## oob

KaeJS said:


> Anyone a buyer?
> 
> Wouldn't management be stupid to cut the dividend? I mean... if you were on the board of directors, would you want to lose millions or would you rather just keep issuing new stock?
> 
> I feel like if they were going to cut the dividend it would have happened already...


Seems like divy cuts are being rewarded by the market right now. See COS last week.
I'm actually tempted to buy this with a potential cut representing "upside".


----------



## KaeJS

oob said:


> Seems like divy cuts are being rewarded by the market right now. See COS last week.
> I'm actually tempted to buy this with a potential cut representing "upside".


CPG issued a press release already saying they are going to leave their dividend stable for 2015 as long as oil is above $20 WTI


----------



## OptsyEagle

KaeJS said:


> CPG issued a press release already saying they are going to leave their dividend stable for 2015 as long as oil is above $20 WTI


Any chance you could link that press release. Sounds a little over-confident to me, but hey I didn't say it.


----------



## KaeJS

OptsyEagle said:


> Any chance you could link that press release. Sounds a little over-confident to me, but hey I didn't say it.


Sure. Sorry, it wasn't a press release. It was an article and the article was citing a telephone interview with CEO Scott Saxberg.

Here is the article about their plan to continue drilling down to $20 WTI: http://business.financialpost.com/2015/01/06/crescent-point-energy-corp-cuts-capital-budget-by-28-to-1-45-billion/

Very last line of the article states: 

_"Regardless of the oil price collapse and the slight drop in production levels, the company said it would maintain its $2.76 per share dividend this year."_

However, the Investor Relations section on their website goes into detail about how they use their 3.5 year hedging strategy to guarantee (to the extent possible) their dividends in a declining oil market.


----------



## OurBigFatWallet

Thanks for the article link. Wow, that is one confident management team. Hopefully it can pan out for them and oil starts to recover soon


----------



## OptsyEagle

Thanks for the article. Just to clarify, what he actually said was that they would keep drilling, even down to $20 WTI. That has nothing to do with the dividend. 

He did say, however, "Regardless of the oil price collapse and the slight drop in production levels, the company said it would maintain its $2.76 per share dividend this year." 

Now I have mentioned before that all managements tend to be 100% in support of their dividend, right up until the day they cut it. This has nothing to do with bad ethics. It has to do with the fact that if he had of told that FP reporter that they "might" cut the dividend, the stock would drop to a point that he might as well have already cut it. Since they may need that strong stock price, to provide needed capital in the future (especially with $20 WTI) and even to pay the dividend itself, management will do their best, not to cause their stock price to decline. There are exceptions, but the majority of managements, tend to act like that. If you are not convinced, just do some research on companies, in the past, that have cut their dividend.

All that being said, I suspect if the oil price stays where it is, investors will probably receive the dividend for 2015. If, however, oil prices stay where they are, I doubt the share price will stay where it is. As investors see those hedges running out, they will start slowly running out of the stock. 

Anyway, I couldn't see his legal department letting him say that they would maintain the dividend at WTI $20, in a press release. That would have been asking for trouble and handcuffing the company going forward. 

Thanks again.


----------



## OurBigFatWallet

OptsyEagle said:


> Thanks for the article. Just to clarify, what he actually said was that they would keep drilling, even down to $20 WTI. That has nothing to do with the dividend.
> 
> He did say, however, "Regardless of the oil price collapse and the slight drop in production levels, the company said it would maintain its $2.76 per share dividend this year."
> 
> Now I have mentioned before that all managements tend to be 100% in support of their dividend, right up until the day they cut it. This has nothing to do with bad ethics. It has to do with the fact that if he had of told that FP reporter that they "might" cut the dividend, the stock would drop to a point that he might as well have already cut it. Since they may need that strong stock price, to provide needed capital in the future (especially with $20 WTI) and even to pay the dividend itself, management will do their best, not to cause their stock price to decline. There are exceptions, but the majority of managements, tend to act like that. If you are not convinced, just do some research on companies, in the past, that have cut their dividend.
> 
> All that being said, I suspect if the oil price stays where it is, investors will probably receive the dividend for 2015. If, however, oil prices stay where they are, I doubt the share price will stay where it is. As investors see those hedges running out, they will start slowly running out of the stock.
> 
> Anyway, I couldn't see his legal department letting him say that they would maintain the dividend at WTI $20, in a press release. That would have been asking for trouble and handcuffing the company going forward.
> 
> Thanks again.


^ good point. He really has no choice but to have an optimistic outlook no matter what. Even the slightest hint of a div cut and the market would take it as horrible news and the stock would tank. Same goes for all others.


----------



## TheVigilante

Honestly I would love to see them cut the dividend. Their dividend payout rate was too high before oil dropped. The stock price would slip, but long term I think it's the best strategic decision to maintain growth. Just my $.02


----------



## Jon_Snow

Nope.


----------



## oob

TheVigilante said:


> Honestly I would love to see them cut the dividend. Their dividend payout rate was too high before oil dropped. The stock price would slip, but long term I think it's the best strategic decision to maintain growth. Just my $.02


Does anyone else think stock would get a bump if dividend was cut? Happened with COS amongst others. If management is truly bullish, then why wouldn't you conserve cash rather than cut capex or strengthen your balance sheet?


----------



## OptsyEagle

A cut today would lob off a huge percentage of the stock price. With COS, it was fairly highly expected that the dividend would be cut. Many investors, thinking they might have had a unique opinion on the cut, would have taken out a short position. COS could not have found a better day to do this cut, coinciding with the start of a 20% increase in oil prices. Add to that the emotional mindset of a short seller watching a position run away from them and you saw what you saw...a stock price rising incredibly fast after a dividend cut.

With CPG, very few people are expecting a cut in the dividend so it would not be so well received. Only my opinion, of course.

Hey, if CPG management thought the stock would rise 30% or 40% with a dividend cut, it would already be slashed by now.


----------



## oob

OptsyEagle said:


> A cut today would lob off a huge percentage of the stock price. With COS, it was fairly highly expected that the dividend would be cut. Many investors, thinking they might have had a unique opinion on the cut, would have taken out a short position. COS could not have found a better day to do this cut, coinciding with the start of a 20% increase in oil prices. Add to that the emotional mindset of a short seller watching a position run away from them and you saw what you saw...a stock price rising incredibly fast after a dividend cut.
> 
> With CPG, very few people are expecting a cut in the dividend so it would not be so well received. Only my opinion, of course.
> 
> Hey, if CPG management thought the stock would rise 30% or 40% with a dividend cut, it would already be slashed by now.


Thanks. Very helpful.


----------



## My Own Advisor

I've wondered why a cut (up to 50%) hasn't happened yet....time will tell!

I'll buy and hold anyhow...I intend to DRIP this one for years to come.


----------



## Toronto.gal

Just like COS has a history of deep cuts/raises, this one has a history of never cutting/reducing? I used to own it, but not at present time.

In late 2008 during the financial crisis, shares dropped to $18 from the high of nearly $42 just 6 months prior. This time around, the drop %wise, is almost identical at around -56% [$48.68/$21.20].


----------



## GOB

I'd be shocked at a cut. Management has been very overt about the strength of their dividend and bragging about how much the stock yields. I know most companies don't give advanced warning of a cut, but the wording has been so far the other way that a cut would be a shock and would send the stock plummeting, in my opinion.


----------



## KaeJS

Remember that CPG just issues new stock to cover the dividend payment, anyway. They will not cut the dividend. It's what they are known for. It is the whole reason they are a "market darling".


----------



## Jon_Snow

And that's why I feel comfortable owning a ton of it.


----------



## KaeJS

Jon_Snow said:


> And that's why I feel comfortable owning a ton of it.


Ohhh, I wish I had as much as you, Mr. Snow.

My position is small. Very small. I plan to hold into eternity, though. Just in case ADVANCESSS makes me immortal.


----------



## TheVigilante

It's a great place for options trading. I end up in this one over and over.


----------



## humble_pie

^^


u know what, i could never agree with the above! those skinflint montreal exchange specialists in CPG options are among the hardest nosed on the planet. They "might" give an investor a nickel in a weak moment, but other than that they will never budge.

i'm hoping a more flexible US options market in CPG will develop, now that the stock trades on new york. So far, not quite enough US volume to justify US options.


----------



## Flash

I'm curious how come no one mentioned this in this thread
http://www.theglobeandmail.com/glob...een-at-crescent-point-energy/article22720621/

Not feeling very confident about this stock


----------



## Westerly

$1,000,000 over 4 insiders? I don't have a particular opinion in this environment, but I'd need more than that to start feeling less than confident about this company.


----------



## OurBigFatWallet

$1M doesn't seem too high for insider CPG selling. It could be as simple as insiders who bought really low ($22) and sold when it hit $33 recently


----------



## Pluto

Flash said:


> I'm curious how come no one mentioned this in this thread
> http://www.theglobeandmail.com/glob...een-at-crescent-point-energy/article22720621/
> 
> Not feeling very confident about this stock


I'm not really impressed with insider selling as proof for concern. Insiders buy for one reason only: they think they will make money. But insider selling is different. They don't necessarily sell because they think the stock will tank, as there are other possible reasons for selling. Maybe the wife wants to buy a seaside condo in Mexico, maybe the kids are going to Harvard and he's paying their way, maybe he's had his eye on a newer bigger boat, and he taking some profits to pay for it - the reasons for selling are endless and it may have nothing to do with the price of oil.


----------



## CPA Candidate

Pluto said:


> I'm not really impressed with insider selling as proof for concern. Insiders buy for one reason only: they think they will make money. But insider selling is different. They don't necessarily sell because they think the stock will tank, as there are other possible reasons for selling. Maybe the wife wants to buy a seaside condo in Mexico, maybe the kids are going to Harvard and he's paying their way, maybe he's had his eye on a newer bigger boat, and he taking some profits to pay for it - the reasons for selling are endless and it may have nothing to do with the price of oil.


I agree, it's a useless signal. Insiders seek diversification like any investor. Dixon just wants you to subscribe to his site.


----------



## humble_pie

buoyant annual & 4th quarter report this am from crescent point.

company said cash flow for 2014 increased 8% over 2013, eg 5.72 vs 5.28.

no mention of dividend other than reference to long dividend history of $.23/month since first public offering. However continued positive cash flow appears able to sustain the high divi. Yield currently hovers around 9%.

lower oil prices will be met with technological improvements, the company said.

_"Despite the downturn in oil prices, the Company is committed to testing and implementing new technology to drive cost reductions and increase recoveries ... Crescent Point is continuously adding to its technical knowledge base and has had recent success experimenting with varying amounts and types of fracture stimulation fluid in the Flat Lake play, as well as a new closable sliding sleeve completion technique in the Viewfield Bakken and Shaunavon resource plays."
_
CPG conference call this morning at 11 am EST. 1-800-355-4959. Replay on website.

i believe it's likely there will be a collective sigh of relief plus a burst of buying enthusiasm for this controversial stock, to be followed by the general malaise facing the industry as it wonders where to store oil once the hubs & offshore tankers fill to capacity while global buying stagnates ... if there's any merit whatsoever to this belief, there will be more opportunities to buy CPG during 2015, for those who missed yesterday's short-term closing low of 27.71.


----------



## Jon_Snow

Well, these latest CPG developments have been music to my ears this morning. Continue to hold this happily.


----------



## humble_pie

CPA Candidate said:


> I agree, it's a useless signal ... Dixon just wants you to subscribe to his site.



sorry i couldn't agree. Ted Dixon is one smart person.

there's an abbreviated version of his service available for free in the internet. Kind of an amuse guele, i imagine.

for those who bite, a much more expanded version - which is still not the full subscriber version - is offered on the TDDI website. Possibly on other broker websites. The TD version is already a 5-course dinner. Very tasty.


----------



## 0xCC

humble_pie said:


> CPG conference call this morning at 11 am EST. 1-800-355-4959. Replay on website.


I hope you meant E*D*T. I expect that Yahoo! Finance might be the only widely used site on the internet that missed the time change over the weekend.



humble_pie said:


> sorry i couldn't agree. Ted Dixon is one smart person.
> 
> there's an abbreviated version of his service available for free in the internet. Kind of an amuse guele, i imagine.
> 
> for those who bite, a much more expanded version - which is still not the full subscriber version - is offered on the TDDI website. Possibly on other broker websites. The TD version is already a 5-course dinner. Very tasty.


Where on the TDDI site can this be found?


----------



## fatcat

0xCC said:


> Where on the TDDI site can this be found?


under "reports"


----------



## 0xCC

The INK Insider reports?


----------



## CPA Candidate

776 million dollar gain on derivatives. The power of hedging.
Oil
Hedged for 2015 57,816 bbl/d @ $91
Hedged for 2016 25,981 bbl/d @ $87
Hedged for 2017 4,492 bbl/d @ $83

Exit liquid production was 128,000 per day. Approximate hedging as a portion of total liquid production is 45% and 21% for 2015/16. If we assume for 2015 that 55% unhedged nets $60 per barrel, the average realized oil price would be about $74 (all amounts CDN).

I won't go into the natural gas side it's not that material, but they have hedges are much better than spot pricing.

They continue to have extremely good netbacks. A very solid company to be invested in this current environment.


----------



## fatcat

0xCC said:


> The INK Insider reports?


yes


----------



## humble_pie

INK insider reports come with each individual stock selection in markets & research.

it's also useful to glance at the 60-day insider trading summaries from time to time. These are the biggest insider buys & sells, by dollar cost, over the previous 2 months. They are also presented by volume, but to me the dollar costs are more significant.

to find these, go to M & R, click Reports. Choose INK. There are several reports including by industry sector. 

happy hunting.


----------



## My Own Advisor

Happy owner of CPG...DRIP away baby at these low prices!


----------



## fatcat

humble_pie said:


> INK insider reports come with each individual stock selection in markets & research.
> 
> it's also useful to glance at the 60-day insider trading summaries from time to time. These are the biggest insider buys & sells, by dollar cost, over the previous 2 months. They are also presented by volume, but to me the dollar costs are more significant.
> 
> to find these, go to M & R, click Reports. Choose INK. There are several reports including by industry sector.
> 
> happy hunting.


right, the sells mean little but when you see a director or office make a large open market buy, it can give you the warm fuzzies


----------



## Flash

Another internal sale
http://sleekmoney.com/crescent-poin...ford-neil-smith-sells-2700-shares-cpg/188551/


----------



## 0xCC

humble_pie said:


> INK insider reports come with each individual stock selection in markets & research.
> 
> it's also useful to glance at the 60-day insider trading summaries from time to time. These are the biggest insider buys & sells, by dollar cost, over the previous 2 months. They are also presented by volume, but to me the dollar costs are more significant.
> 
> to find these, go to M & R, click Reports. Choose INK. There are several reports including by industry sector.
> 
> happy hunting.


Thanks h_p and fatcat (sorry, forgot about asking this question).


----------



## humble_pie

Flash said:


> Another internal sale



rough eyeball tally shows that clifford smith sold something like 19,000 shares starting a week ago.

this does not distress me. There can be plenty of disparate reasons for insider selling. He might even be planning to buy them back on a dip, who knows.

https://canadianinsider.com/node/7?ticker=CPG


----------



## yyz

I'd be more worried if Jon Snow sold his shares


----------



## humble_pie

^^

now _there's_ the real marker

snow if u do sell, perhaps better not to post on here? you'll start a tsunami, a hurricane like nothing you ever did see in Baja


----------



## OurBigFatWallet

Flash said:


> Another internal sale
> http://sleekmoney.com/crescent-poin...ford-neil-smith-sells-2700-shares-cpg/188551/


Interesting move at a time when (according to the article) some analysts are raising their price targets


----------



## yyz

Sure but who knows why he's selling.Bigger house,new car ,kids need braces ,divorce settlement there's just no way to tell

And it's 1 guy.Now if there were multiple insiders selling that may be a different sign.


----------



## humble_pie

an examination of Clifford Smith's trading history on SEDI dot ca reveals an exceptionally active trading history in crescent point.

in 2015 alone, mr smith has already initiated no less than 11 transactions in CPG. 

in 2014, 19 transactions.
in 2013, 20 transactions.
in 2012, 23 transactions.

i didn't go back further, although mr. smith is a CPG insider dating way back to trust unit days.

here is the SEDI link to the full Smith history, although it probably won't work. This part of the SEDI website is secure. Any party wishing to view the smith details would have to carry out a new SEDI search.

https://www.sedi.ca/sedi/SVTItdSelectInsider?locale=en_CA

bref, we should probably forget about clifford neil smith as a crescent point shareholder bell-wether. He's something more of a trader.


----------



## My Own Advisor

humble_pie said:


> ^^
> 
> now _there's_ the real marker
> 
> snow if u do sell, perhaps better not to post on here? you'll start a tsunami, a hurricane like nothing you ever did see in Baja


+1


----------



## KaeJS

Nothing to be concerned about.


----------



## My Own Advisor

Nothing to see here


----------



## OurBigFatWallet

CPG to overhaul executive compensation: http://business.financialpost.com/n...orp-joins-say-on-pay-movement?__lsa=4cc2-5a40


----------



## 0xCC

Earnings are out today. Compared to last year they are not very pretty. I only glanced at them so far though.


----------



## Jon_Snow

Surprisingly decent...look again.


----------



## 0xCC

25% drop in revenue, per barrel average selling price dropped 45%-50%, dividend payout ratio went from 48% to 72%.

Considering the price of oil over the quarter that drop in revenue isn't bad, they did it by increasing output. Drilling activity was good, can't argue with a 100% success rate.

They have some good hedges in place for the rest of 2015 and a little bit less for 2016. Given the fact that the oil price has come back up a good amount the current quarter should be much better. Hopefully oil has bottomed and these results will be as bad as it gets.

Maybe compared to other energy companies CPG has done well this quarter but due to the tough environment (and not something management did) this report isn't an example of a good quarter...


----------



## doctrine

My quick analysis:

Funds flow was $433 million. $312M of dividends paid. $558M of capital expenditures. Most oil companies call that an all-in payout ratio of 200%. These numbers include hedges; the numbers based on spot pricing are worse. 

At least they only have $3.5B in debt, although a year ago, they had $2.3B in debt.

CPG needs oil to return to >$75 and maybe >$80, or the dividend will eventually be cut. The 9.2% yield is definitely reflective of the risk. The oil companies still paying dividends and all-in payouts less than 80% with reasonable debt have yields less than 5%, reflecting more stability.


----------



## KaeJS

I didn't think the report was all that bad considering...

Of course, it was not stellar. But it wasn't worse than I had expected. 

doctrine, it is more CPG's brand that they don't cut the dividend. I personally don't think they will. I don't think oil will be $60 a year from now. It will be higher and CPG's dividend will continue. I just wouldn't expect any future dividend increases for years to come..


----------



## My Own Advisor

Doctrine is probably right about oil needing to be >$75 for CPG to be in the black. 

Will it get there within another year? We'll see!!


----------



## 0xCC

KaeJS said:


> I personally don't think they will. I don't think oil will be $60 a year from now. It will be higher and CPG's dividend will continue. I just wouldn't expect any future dividend increases for years to come..


Agreed, it isn't like they were increasing it when oil was triple digits. I don't see them starting any increases before oil is at triple digits again.


----------



## CPA Candidate

Cash dividends paid in Q1 were 234 million. The cash dividend as a % of the cash generated is still only 56% in likely the worst Q they will ever see.

I'd like to see them dial back on capital expenditures to a greater degree. But to be fair they spent about 40% of their annual budget this quarter.

I think it's possible due to their high quality low decline wells that they are simply looking to kill other companies and buy their properties cheaply.

I don't mind taking on some debt as the company has always been under levered. They issued a lot of equity when their shares were high and now they are using low interest debt when their shares are low, that's just good finance.


----------



## OurBigFatWallet

Crescent Point predicts bargain-bin assets if royalties are reviewed: http://calgaryherald.com/business/energy/crescent-point-grows-output-but-posts-first-quarter-loss

Might be a good opportunity for them to buy some Alberta assets for cheap if the markets get scared about the upcoming royalty review


----------



## Vicjai

I sold my Crescent Point Energy late last year as it kept going down. If balance sheets remain healthy, we just gotta wait till oil prices creep back up to atleast $70 to see any signs of significant price increase for this stock, which can be months to years. For now, people who still have CPG, hold it and enjoy the 9% dividend for now.each:


----------



## Jon_Snow

Vicjai said:


> I sold my Crescent Point Energy late last year as it kept going down. If balance sheets remain healthy, we just gotta wait till oil prices creep back up to atleast $70 to see any signs of significant price increase for this stock, which can be months to years. For now, people who still have CPG, hold it and enjoy the 9% dividend for now.each:


Oh, trust me, I enjoy it very much at the middle of every month. Ka-ching!


----------



## Toronto.gal

Vicjai said:


> I *sold* my Crescent Point Energy late last year *as it kept going down.*


What oil stocks were going up at that time?  By mid. Dec., the stock had dropped nearly -60% [$48.68/$21.20].

I stayed away because of the high yield [waiting for it to be cut], but was a buyer at that time, not a seller.


----------



## JordoR

CPG is such a long term hold for me I'm not too concerned about the current price. It's crazy to see how many shares I've dripped in just a years time, so I'm definitely enjoying that for the time being.


----------



## KaeJS

Toronto.gal said:


> I stayed away because of the high yield [waiting for it to be cut], but was a buyer at that time, not a seller.


Not sure how this is going to play out. I think they will hold out for 2015, but 2016 might come with a dividend cut.

I'm trying to play both sides right now. I have long positions, puts and calls all over this one. A cut would be nice. That's when I would load up the truck.... right after the stock falls to $20.


----------



## AltaRed

JordoR said:


> CPG is such a long term hold for me I'm not too concerned about the current price. It's crazy to see how many shares I've dripped in just a years time, so I'm definitely enjoying that for the time being.


I believe you actually bought those with your own capital since it is my understanding they issue new shares to cover their dividends... which really means shareholder dilution of your own equity. Had CPG actually gone to the market to buy those shares to cover DRIPs, I suspect share price would (should) be higher. As always, the ongoing debate about how DRIPs benefit, or deceive, shareholders... take your pick.


----------



## favelle75

Vicjai said:


> I sold my Crescent Point Energy late last year as it kept going down. If balance sheets remain healthy, we just gotta wait till oil prices creep back up to atleast $70 to see any signs of significant price increase for this stock, which can be months to years. For now, people who still have CPG, hold it and enjoy the 9% dividend for now.each:


Or, if you bought in during the December bottom, you are enjoying the 12-13% dividend.


----------



## My Own Advisor

JordoR said:


> CPG is such a long term hold for me I'm not too concerned about the current price. It's crazy to see how many shares I've dripped in just a years time, so I'm definitely enjoying that for the time being.


+1 Buy and hold and reinvest.


----------



## Vicjai

Toronto.gal said:


> What oil stocks were going up at that time?  By mid. Dec., the stock had dropped nearly -60% [$48.68/$21.20].
> 
> I stayed away because of the high yield [waiting for it to be cut], but was a buyer at that time, not a seller.


I didn't actually sell at rock bottom, i sold before that but kept it in energy. I was moving some stock around and the capital ended up going back to Suncor. You guys think CPG is sustainable with the high yield?


----------



## KaeJS

Vicjai said:


> You guys think CPG is sustainable with the high yield?


For 2015 at least.... After that.... probably not depending on oil prices.


----------



## CPA Candidate

I checked the Natural Resources Canada website and as of May 8th, Edmonton Light Sweet crude is going for $70 CDN a barrel. Last year's absolute peak was $105 and average was $94. 

http://www.nrcan.gc.ca/energy/fuel-prices/crude/17404


----------



## JordoR

http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/crescent-point-buys-legacy-oil-gas-for-563-million/article24628244/

CPG Buys Legacy Oil & Gas for $563 million


----------



## AltaRed

JordoR said:


> http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/crescent-point-buys-legacy-oil-gas-for-563-million/article24628244/
> 
> CPG Buys Legacy Oil & Gas for $563 million


And has a secondary offering on the market @ $28.50 to pay for it.


----------



## Synergy

^ Back to their old tricks again...


----------



## mars

I got the offer for the $28.50 through TD Waterhouse. Was thinking about it but will probably pass at this time.


----------



## humble_pie

AltaRed said:


> And has a secondary offering on the market @ $28.50 to pay for it.




altaRed i do appreciate your skeptical eye, i do, indeed i do.

but won't you please help out a dumb crumb here. CPG buys legacy for 563M, files a secondary offering of 600M.

no one is opining that CPG is outrageously overpaying for legacy. Does not the purchase add assets, so if the price paid for legacy is indeed fair & reasonable, then will not the post-issue aggregate of shares still have more or less the same equity value, on a per share basis?

it occurs to me that perhaps the Achilles' heel is the near $1 billion in legacy debt that CPG is assuming ...


----------



## humble_pie

lukewarm-to-mildly-favourable article in today's Globe. It looks as if Crescent Point played the white knight role, riding in to squash a possibly hostile takeover of Legacy by FrontFour.

although no doubt legacy had been on CPG's shopping list for months already - the ambitious shopping list that CEO Scott Saxburg had discussed with the media way back in late 2014, as mentioned in posts upthread.

http://www.theglobeandmail.com/repo...gacy-oil-gas-for-563-million/article24628244/


it doesn't appear that CPG overpaid for Legacy, paying $563M in stock in a deal that prices beaten-down legacy at 2.85/sh, or just 4.6% above recent 30-day weighted average price.


----------



## doctrine

They have to issue shares, because the last time I looked, LEG had a ridiculous debt-to-cash flow ratio of > 6 times. While CPG might need a dividend cut in 6-12 months with oil at $50-60, LEG was looking at simple bankruptcy. The shares will more or less wipe out the debt that LEG had on the balance sheet. And, of course, provide at least 6 months of dividend payments to current shareholders out of equity if necessary. Safe, but definitely fits their model of dividends first, not share appreciation.


----------



## humble_pie

thanks for insight. The legacy debt is high, though. $967M, says the globe & mail. But the LEG properties will be pumping from takeover day one, says globe.

re the CPG model of dividends first, not share appreciation. Alas, poor Yorick, i knew ye once, has it truly come to this. I imagine this is why premium in CPG options has shrunk to zip.




doctrine said:


> ... The shares will more or less wipe out the debt that LEG had on the balance sheet. And, of course, provide at least 6 months of dividend payments to current shareholders out of equity if necessary. Safe, but definitely fits their model of dividends first, not share appreciation.


----------



## CPA Candidate

I think shareholders for both companies did pretty well. Legacy shareholders were facing total financial annihilation. They had very little hedging and the realized pricing in Q1 was horrendous and costs were rising, bankruptcy wasn't too far off. At least they get out with something. 

CPG shareholders get assets that fit in well with their strategy in Saskatchewan and are quite inexpensive.


----------



## AltaRed

humble_pie said:


> thanks for insight. The legacy debt is high, though. $967M, says the globe & mail. But the LEG properties will be pumping from takeover day one, says globe.
> 
> re the CPG model of dividends first, not share appreciation. Alas, poor Yorick, i knew ye once, has it truly come to this. I imagine this is why premium in CPG options has shrunk to zip.


As said upthread, CPG is up to its old tricks. Only CPG knows if they believe they have purchased an accretive acquisition. Existing shareholders have to hope so given the secondary offering @ $28.50 is way below CPG's historical price closer to $40. IOW, did CPG buy $40/share worth of value? Two things appear to be in CPG's favour: 1) Legacy was in distress as evidenced by its share price, and 2) at least some of Legacy's assets are in CPG's area of operations which should add some synergies (cost cutting). Really not going to examine this any closer.... as I don't buy companies that diilute my equity regularly or use my own money to fund DRIPs.


----------



## jerryhung

Bought some @ $28

Today is ex-div date too


----------



## CPA Candidate

AltaRed said:


> as I don't buy companies that diilute my equity regularly or use my own money to fund DRIPs.


Why don't you take it a step further and stop posting on them, too.


----------



## AltaRed

CPA Candidate said:


> Why don't you take it a step further and stop posting on them, too.


My intent is to provide some counterbalance to the cheerleading. This business model may, or may not, end well. Remember the darling Renaissance? A different business model to be sure, but it could do no wrong. Investors invested in droves and BNN talking heads fell over themselves on that one. Successful themes sometimes hit the wall at some point.


----------



## KaeJS

CPA Candidate said:


> Why don't you take it a step further and stop posting on them, too.


This post was unnecessary.

AltaRed was trying to help. Actually. AltaRed *did* help and _does_ so in many threads.


----------



## JordoR

^^ Yes. I think everyone appreciates commentary on both sides of the fence regardless of whether you own or are planning to own the company.


----------



## supperfly17

AltaRed said:


> My intent is to provide some counterbalance to the cheerleading. This business model may, or may not, end well. Remember the darling Renaissance? A different business model to be sure, but it could do no wrong. Investors invested in droves and BNN talking heads fell over themselves on that one. Successful themes sometimes hit the wall at some point.


Dont listen to that wanker CPA, keep posting, your commentary is always welcome.


----------



## blin10

they keep diluting company shares, not a fan of cpg


----------



## Synergy

KaeJS said:


> This post was unnecessary.
> 
> AltaRed was trying to help. Actually. AltaRed *did* help and _does_ so in many threads.


Agreed. Comments, opinions, etc. are always welcome!


----------



## zylon

For a few months last year I was kicking myself for having sold CPG at $39 in 2013. Not kicking anymore; this sucker looks like it's headed to $21

May I suggest an energy shopper do some browsing in USA?










source: http://seekingalpha.com/article/331...ing-to-a-winning-ranking-system-valero-energy


----------



## jerryhung

Man, this kept dropping, with possible issuing of new shares $2.5B

I should not have bought so many energy stocks  oh well, here's hoping back to $30+


----------



## atrp2biz

Added some more CPG to the portfolio this morning. It has one of the better balance sheets in the sector. Check out the D/E ratios of some of those US companies above.


----------



## OptsyEagle

WOW. Shareholders are certainly getting annoyed with the constant dilution. I could possibly see a drop like this if they DID issue $2.5 billion dollars worth of shares, but to drop this much because they MIGHT issue shares is kind of strange. I suspect all they are saying is that since we are in an interesting time in the oil patch where other companies that took on too much debt may have to put really good assets up for sale, at possibly fire sale prices, wouldn't it be nice to be able to bid on them. I couldn't imagine that a shareholder would not want them to have this ability.


----------



## favelle75

OptsyEagle said:


> WOW. Shareholders are certainly getting annoyed with the constant dilution. I could possibly see a drop like this if they DID issue $2.5 billion dollars worth of shares, but to drop this much because they MIGHT issue shares is kind of strange. I suspect all they are saying is that since we are in an interesting time in the oil patch where other companies that took on too much debt may have to put really good assets up for sale, at possibly fire sale prices, wouldn't it be nice to be able to bid on them. I couldn't imagine that a shareholder would not want them to have this ability.


Same here. I don't see how a shareholder would ever want them to pass on some of these deals. Yeah, share dilution sucks, but if they are acquiring that much more BPD and becoming THAT much bigger of a player, is it really dilution in the end?


----------



## doctrine

I think it's a pile-on effect. CPG is already down 25% in the last few months, as WTI has decisively slid back down towards $50. Worldwide oil production is up 3.1 mbpd worldwide in the last 12 months. That alone is enough for up to 3 years of basic demand growth, and more growth is coming in production. And then CPG decides to pile on a $2.5B prospectus. 

Their equity is not worth what it used to be. And the dividend is definitely at risk. None of this is news, of course. 11.5% yield says it all.


----------



## fatcat

doctrine said:


> I think it's a pile-on effect. CPG is already down 25% in the last few months, as WTI has decisively slid back down towards $50. Worldwide oil production is up 3.1 mbpd worldwide in the last 12 months. That alone is enough for up to 3 years of basic demand growth, and more growth is coming in production. And then CPG decides to pile on a $2.5B prospectus.
> 
> Their equity is not worth what it used to be. And the dividend is definitely at risk. None of this is news, of course. 11.5% yield says it all.


thats why i sold a few days ago

if these prices continue to get weaker something will have to give ... 11.5 yield is something like a free lunch

and we haven't even gotten a result from the iran nuclear talks
flip of a coin says they make a deal and that will rattle oil markets even further
no deal might or might not have the opposite effect


----------



## MRT

zylon said:


> For a few months last year I was kicking myself for having sold CPG at $39 in 2013. Not kicking anymore; this sucker looks like it's headed to $21
> 
> May I suggest an energy shopper do some browsing in USA?
> ...


I played around with creating my own stock screeners a little while back, and Valero came up at #1 on the entire list (not just energy stocks). It was trading around $34 at the time, though I did not buy.

The decision was a wise one at the time, given my complete lack of knowledge about the sector, and stock price evaluation in general (most of my portfolio is index ETFs)...but of course I'm disappointed in hindsight lol


----------



## My Own Advisor

Happy to DRIP thereby buying more.


----------



## humble_pie

there do seem to be numerous voices in several threads saying they are happy to see stocks they are DRIPPing plunge, because the fall offers them an opportunity to DRIP more new shares at lower prices.

i'm wondering if these folks are looking at the numbers straight though? CPG for example has fallen 35-40% from recent highs in the $40 range. Even *if* the dividend holds at 23 pennies per month, with a current yield north of 11%, it will take folks years & years to get their capital back & break even via dividend accumulation.

possible capital growth in the share price of a stock such as CPG is another story. Possible capital accumulation via option sales is yet another story. But dropping 40% in order to wait 3 or 4 years, only to break even with hoped-for (but not guaranteed) dividends does not seem to be an appealing story.

here is a current post on oil prices from a nearby thread. It's bearish & the speaker is none other than oil analyst keith schaefer. He's anticipating $40 WTI.



1980z28 said:


> http://www.bnn.ca/News/2015/7/10/Blame-Canada-for-oil-oversupply-and-price-wars-Keith-Schaefer.aspx


closer to home, cmf's own altaRed seems to have been suggesting a long flattish trough for oil prices & oil stocks since december/14, or possibly even previously. His forecast might even predate keith schaefer.

given the gloom, i for one believe that prudence should rule. Me i cut holdings in CPG by 50% more than 6 months ago. Other oilcos keep beckoning with alluring low prices but i've been able to resist, save & except for a small excursion into bankers' petroleum (could not resist in the mid-$2 range) (bnk has decent options as well) (although when all is said & done buying bnk may have been a foolish step)

one thing to comfort the die-hards who are still buying/dripping CPG & other canadian energy stocks: when the bottom eventually gets in, or when the saudis start cutting - whichever first occurs - oil patch stocks will recover faster than the speed of sound or light. By the time anyone will be able to figure out what's happening, markets will have shot up 20-35%. It'll be too late for newcomers to join the crowd. The first big leg of the race will go to the players who are already in.

so if you're in & you don't mind sweating ice cubes, you're in


----------



## dubmac

adding to HP's comments, I read a good article on energy co valuations in July 11 G&M by scott barlowe
https://secure.globeadvisor.com/servlet/ArticleNews/story/gam/20150711/RBGICHARTOFWEEK
_During the financial crisis, the sell-off made stocks cheap but the recent weakness leaves producers more expensive than when the downdraft began. The producers index has an average price-tocash-flow ratio of 6.3 times after a volatility-filled week of trading that, while not grossly expensive relative to market history, is less attractive than many investors may think given the 46-per-cent fall in stock prices._


----------



## tkirk62

Yes while the share price has dropped and it will take years to "earn back" that money with dividends, if one holds Crescent Point for the income it produces via dividends there is no loss for which to make up. Given what I know about the company now, I personally am very comfortable holding my shares for years, decades even. In the short time I have owned CPG (I bought my shares like an idiot right before the collapse with an ACB of around $40), I've accumulated 16 shares, which represents $39.52 of annual income (assuming the dividend is not cut). And each month that annual income increases by 46 cents. Any further drop in price and a few more months of DRIPs and I should be able to DRIP 3 shares per month. It has essentially created 5% growth of a static dividend in a year. Not to mention that based on my due diligence CPG at these prices still represents a good value and I am happy to accumulate more shares. As it is my ACB has dropped to about $38.50, so still a huge, painful to look at loss but that ACB will drop 14 cents if I DRIPped three shares at Friday's closing price. Again, still a huge loss, but it's reduced from a 37.9% to 37.6% loss. There's something to be said for that.

If the dividend were cut in half (maybe prudent and needed, maybe not, I'm not opining on that issue), I would examine the company and numbers again but probably still happily DRIP my one share, or two if the price collapsed to allow it. 

It may not be for everyone, as "income" can be produced via capital gains as well, which is often mentioned. But I am comfortable with my CPG shares and have thoroughly examined the numbers. In my case I see the value of the DRIP. I hope others look at things as closely as I have, but I don't think I can be accused of not looking at the numbers straight.

tl;dr I like DRIPs


----------



## KaeJS

^ You have 16 shares.

You only lose $16 for every $1 the stock falls. I wouldn't be concerned either.

Have you thought about the people that have, say, 1000 shares or more?


----------



## tkirk62

I have 306 shares, and have synthetically DRIPped 16 shares over the course of the eight months I have held CPG


----------



## doctrine

If oil hits $100 Cdn again, CPG will return to $40. But I fear that if oil hits $40, then CPG is destined for the mid-teens. Even if it stays at $50 for a year, you could see a dividend cut within 6-9 months - what would that do to the stock price? (Certainly, it would drop below $20). They really need $80 Cdn (let's say $70+ WTI) oil to continue their model for at least a few more years. You just have to ask yourself, which of these scenarios is the most likely?


----------



## humble_pie

doctrine said:


> If oil hits $100 Cdn again, CPG will return to $40. But I fear that if oil hits $40, then CPG is destined for the mid-teens. Even if it stays at $50 for a year, you could see a dividend cut within 6-9 months - what would that do to the stock price? (Certainly, it would drop below $20). They really need $80 Cdn (let's say $70+ WTI) oil to continue their model for at least a few more years. You just have to ask yourself, which of these scenarios is the most likely?



this post might be a bit simplistic, though. Crescent point is a master hedge runner, any projection insisting that oil must sell at $80 oor higher for CPG to make money is not allowing for their hedging capabilities.

all in all, if my only choices boiled down to a) a company with a rock-solid commodity to sell that happens to be slogging through a challenge period, or b) a company dealing in sub-prime debt that appears to be hyper-inflated to bubble levels, i believe i'd choose the former ...


----------



## KaeJS

tkirk62 said:


> I have 306 shares, and have synthetically DRIPped 16 shares over the course of the eight months I have held CPG


Makes sense. I apologize. When you said "accumulated" I thought you had bought 16 shares.


----------



## AltaRed

humble_pie said:


> Crescent point is a master hedge runner, any projection insisting that oil must sell at $80 oor higher for CPG to make money is not allowing for their hedging capabilities.


In the past for sure. Maybe not going forward. Consensus oil price projections are coming down significantly for forward years as optimism on price recovery wanes. New hedges will have to be bought at/below those prices to be affordable. After all, there is a counterparty to these contracts and they expect to make money on them too. Hedging is not unlike the jockeying of positions in the battle of Waterloo.

What we don't know is what new hedges CPG may have already put into place for 2016 before long term sentiment deflated to current day levels. Perhaps some insight coming in 2Q results next month?

Added: Much to be gleaned from here http://www.barchart.com/commodityfutures/Crude_Oil_WTI_Futures/CL


----------



## humble_pie

AltaRed said:


> What we don't know is what new hedges CPG may have already put into place for 2016 before long term sentiment deflated to current day levels.



information concerning crescent point's hedges - those already in place go out to the year 2018 - is everywhere. Information can be found in the company's news releases & management discussions. In numerous articles by reliable journalists writing in national media. Information can even be found in several cmf threads!

CPG says it's well-hedged for 2015 & "poised to produce reliable cash flows, even in a low commodity price environment."

"Crescent Point has more than 50 percent of its 2015 oil production hedged, net of royalties, with an average price above CDN$90.00/bbl and 53 percent of its 2015 natural gas production hedged, net of royalties, with an average price of CDN$3.60/GJ. The Company has additional hedges in place for 2016, 2017 and into 2018."

http://www.crescentpointenergy.com/...-billion-capital-expenditures-budget-for-2015


in march 2015, the Financial Post quoted crescent point as "benefiting from a strong hedging program, with about 56% of oil production hedged for 2015 at an average price of $89 per barrel and 33% of its oil production for 2016 hedged at an average price of $84."

http://business.financialpost.com/n...elds-crescent-point-energy-corp-from-downturn


one-third of 2016 production hedged at $84 looks good to me. After all, the current oil plunge was exacerbated by the saudi/OPEC decision in late 2014. 

short of a depression-era global collapse, for what reason would we construe that the present commodity trough will last 4 years, through 2018 or even beyond? this would be an atypically long time frame, no?


----------



## AltaRed

I was referring to what the company may have done since 1Q15 results. I can believe they will report in 2Q results in August of more hedges. The question is how much more of 2016 production is hedged and at what price....and what, if anything, additional might be hedged in forward years beyond that. A company cannot risk committing too much forward since they are on the hook if their business unravels.


----------



## james4beach

Excuse my cold heartedness for CPG, but what's the point of holding something if - even with its dividends included - it still does worse than the sector average?

Looking at the chart, for 3 years now CPG has done worse than XEG. So why don't you just hold XEG to get the sector average performance? It's higher than CPG and eliminates company-specific risk. Chart of CPG divided by XEG, which includes dividends in both. Since it's declining, it shows that CPG under-performs XEG.

This note is especially important for you DRIP'ers. By DRIP'ing, you're not even receiving the cash dividends paid out to you... all you have is the equity value, right? So what possible advantage does CPG have over XEG?

(Though I will note that on the 5 year time span, CPG has done better than XEG)


----------



## Synergy

james4beach said:


> (Though I will note that on the 5 year time span, CPG has done better than XEG)


Do you not mean 10 years? On a 5 year chart, CPG underperformed XEG by approximately 10%. On a 10 year chart, CPG outperformed XEG by approximately 50% (not including dividends). No current position in CPG, holding XEG until the dust settles in the oil patch.


----------



## humble_pie

we've already discussed the one-third of 2016 production hedged at $84. As mentioned this figure looks good to me. It stands to reason that contracts put in place more recently will reflect lower O & G prices. No one would expect otherwise.

CPG's own table shows markedly less hedging for 2017 & 2018. For '17, ranging from 14% hedged in Q1 down to 8% in Q4. For '18, roughly 7% is hedged for Qs 1 & 2.

no one in this forum is familiar with the nitty gritty details of CPG's hedging history. However, in periods of ultra-low prices for an underlying stock or commodity, it is common for future derivative & option trading to decrease. This occurs because it's wiser to forego all hedges - ie adhere to spot prices only - on the grounds that spot prices when the cyclical low period comes to an end are likely to be far higher than they were at the bottom of the trough.

oil gets stored for the same reasons. It's not worth selling at current low prices. Better to deliver on spot & wait for the cyclical upswing to resume.

hedging by selling cheap low-priced futures during a prolonged trough in the price of gold was a strategy that brought once-proud barrick to its knees. A few years later, after the price of gold had recovered, barrick was still hideously fettered by the low gold hedge prices to which it had committed itself during the cyclical trough years.

i don't know crescent point well enough to know whether their hedge wizards roll up hedging practices & revert to spot prices during ultra-low oil price troughs. If CPG hasn't done this in the past, no one can possibly know whether they might embrace this strategy in the present.

i agree that such a strategy could affect dividend levels for CPG, but it appears that would be only if the trough in the cycle prolongs into 2017 & 2018.


----------



## humble_pie

james4beach said:


> Excuse my cold heartedness for CPG, but what's the point of holding something if - even with its dividends included - it still does worse than the sector average?



james4 are u not being coldhearted about that old dinosaur, the eternal stock-vs-index debate?

people buy stocks, especially at cyclical lows, because they warmheartedly believe - rightly or wrongly - that their stock picks will surpass the sector index.

james did u not recently tell us that you'd just warmheartedly purchased another slate of fairly speculative canadian mid caps & small caps. Ca donne vraiement un coup de chaleur. Are u not hoping that these cherry picks are going to surpass their sector indexes each:


----------



## james4beach

Well that's true humble_pie, I have been buying individual stocks with the belief they will outperform the index and one could buy CPG for the same reason.


----------



## fatcat

i would prefer to own ZEO over XEG and sell my individual o&g and pipelines
but i can't own either one since i would be buying into all the pfic reporting for the irs which at the moment is completely opaque and undefined
not worth the risk


----------



## jerryhung

CPG -4% for no apparent news
more than oil or other oil stocks

-15% in 1 month


----------



## Flash

Another opportunity for a topup? Even an inside director bought shares according to google's news feed.


----------



## humble_pie

crescent point seems to be having a Greek day

perhaps it was the reminder that 2018 hedging is less than 8%, while 2017 hedging barely touches 14% in Q1, then slides down from there?

meanwhile charts in cpg are looking so bullish one could weep. Stochs, RSI, moving averages, everything is screaming bull, bull, bull

does anybody have any advanced bearish indicators? something must be wrong with my charts, or wrong with the way i'm reading em ...


----------



## CPA Candidate

The market doesn't seem to like CPG issuing shares for acquisitions even if the targets are cheap and distressed, have good well economics, the location and nature of assets fits in the overall strategy and it is accretive to existing shareholders.


----------



## humble_pie

CPA Candidate said:


> The market doesn't seem to like CPG issuing shares for acquisitions even if the targets are cheap and distressed, have good well economics, the location and nature of assets fits in the overall strategy and it is accretive to existing shareholders.



the wolfgang schaeubles & the angela merkels are having a field day today


----------



## CPA Candidate

humble_pie said:


> perhaps it was the reminder that 2018 hedging is less than 8%, while 2017 hedging barely touches 14% in Q1, then slides down from there?


Please....name one other company with _any_ hedges in 2018. Your trolling is much less clever than you think. Maybe you should find something useful to do with your time.

Time to finally put you on ignore.


----------



## humble_pie

tch, such a nasty CPA candidate. Unlike yourself, i never troll. I've commented on CPG - sometimes for, sometimes against, but generally fairly - ever since this forum was founded. 

others in cmf forum are prominent & permanent CPG enemies. Would you even be able to name the anti-crescent point militia, candidate? or are you too busy inventing the nasties :biggrin:


----------



## Killer Z

I believe several are concerned about the stampede that will ensue with an announcement of a dividend cut .......the question is, will a dividend cut ever happen?


----------



## zylon

humble_pie said:


> ... meanwhile charts in cpg are looking so bullish one could weep.


Fersure - looks good here too! ... oh, wait a minute ...










*Disclaimer:*
_“Things are not always what they seem; 
the first appearance deceives many; 
the intelligence of a few perceives what has been carefully hidden.”_
~Phaedrus

~~~~//~~~~

Thinking of putting in a stink bid in anticipation of dividend cut.
But how much of a cut - 25% 50% 100% ?
Would I want to own this with no dividend?
Sure, for a bounce - if I can get the entry correct.


----------



## jerryhung

broke -5%

well, MBT went through a dividend cut and it recovered very nicely... from $24 to $28, too bad I didn't average down (cost around $30)
Yes, it's not tied to Oil, but I don't know if a dividend cut is really the evil. COS had its big cut too...


----------



## KaeJS

Doubtful they will cut the dividend in 2015.
And if they do cut - it's going to hurt.


----------



## AltaRed

I will speculate (and it is only speculation) that money managers are starting to bail, or at least lighten up. The filing of the prospectus for essentially a blank cheque to issue so much potential equity to 'fund what they want' likely does not sit well with fund managers. It essentially allows CPG management to do as they wish without coming back to the shareholder. Without checking the numbers for accuracy, I think it represents potential growth of circa 25% from the market cap it is today. That may well be a winning strategy to gobble up distressed companies or a python that might have trouble digesting the pig. Time will tell.


----------



## blin10

interesting, street banks on divi cut...


----------



## My Own Advisor

"...or a python that might have trouble digesting the pig."

I like it


----------



## Synergy

CPG could be in for a little more pain this morning.



> Brent crude sharply lower as market prepares for flood of Iranian oil after nuclear talks end in deal that could lift sanctions


http://www.telegraph.co.uk/finance/...eal-as-brokers-warn-Opec-must-cut-output.html

I may start picking away at XEG again if oil continues to slide. I'm going to stay away from individual companies for the time being.


----------



## humble_pie

the way i see it, CPG is an iconic company pursuing a strategy of aggressive growth through acquisition that in some ways reminds an onlooker of Valeant Pharmaceutical. Canada's Concordia Health is another following a business model that is almost identical to Valeant. By definition, debt levels for these companies are high. Actual earnings can suffer. Cash flow is king.

it doesn't matter whether such a company would pay out cash as dividends (the CPG model) or fuel a rise in share price by retaining all cash & paying zero dividends (the VRX model.) A similar strategy of horizonless growth & frequent acquisition drives both.

one has to ask oneself, how & when will it all end? CPG has long ago moved past strictly bakken crude production. For several years now the company has been producing oil in Utah & other US states, has diversified into gas. VRX is moving pharmaceutical delivery into the middle east, a vast & previously untouched market for any successful western drug manufacturer.

are the limits to expansion by these talented companies actually in sight? or is the nay-saying coming from hidebound traditionalists like germany's finance minister wolfgang schaeuble, who keeps insisting that the eurozone must stop & start exactly on his arch conservative balance line?


----------



## al42

From IR

The last two trading days did see significant pressure on the CPG stock. From my discussions with the trading desks there was a couple of factors.

1.	On Friday we filed a shelf prospectus in the US and Canada, which was received by the markets as an intention to issue equity imminently. This is not the case, this was just a procedural document which CPG has been working on since we listed on the NYSE.
2.	Rumors start to spiral that we are reducing our dividend when our prices fall (we’ve seen it a few times before) which is also not the case
3.	Once the large ‘short’ funds in NY and TO see a stock that is having pressure, they move onto a stock to continue driving it down (it’s their business model)

So aside from our shares dropping 10% in 2 days, nothing has changed from our perspective, our cash flow is the same, our hedging program is the same and our capital program is the same.

It is hard to watch, but sometimes the market overreacts to events.

Hope this helps…

Ryan Wilken, MBA
Investor Relations
Crescent Point Energy Corp.
[email protected]
(p) 403.767.6457
(c) 403.200.1252
(f) 403.639.0070
toll free: 1.888.693.0020
TSX NYSE: CPG


----------



## humble_pie

thankx al42

ryan wilken is an IR professional who is understandably dedicated to CPG's point of view, but at this moment i agree with what he has said. 

the company didn't change, the cash flow is the same, the well-announced hedging program is the same even though there are a few nay-sayers on here who wish to insist that no hedging later than 2015 has been announced, the capital program is the same, as far as we know the dividend is the same today as it has been since crescent point first went public ...


----------



## fatcat

it seems to me that what he says now counts for little
investors want to know what he will say when iran starts pumping and the saudis keep pumping and we see oil sitting at 40 for for the next 2 years
this is a company with a 12% dividend, virtually always a red flag for any company, especially with CPG where the dividend is the their brand


----------



## Homerhomer

fatcat said:


> it seems to me that what he says now counts for little


absolutely, if he knew the dividend will be cut tomorrow he would still say the same thing, there have been countless instances where the companies would say the dividends are to stay just to cut them the following month.


----------



## yyz

Things probably aren't as rosy in S.A. as they let on

http://www.cnbc.com/2015/07/12/fina...rrows-4bn-as-oil-price-reality-hits-home.html


----------



## AltaRed

SA has never said anything about things being 'rosy'. They simply have said they will protect market share. I would do the same thing and I would do so when my financial reserves are at their peak and can thus stay the course longer than virtually anyone else. 

IF you were SA, would you rather back pedal on market share to sustain price, but at the same time lose revenue (relative to competitors) and become weaker financially (relative to competitors), eventually becoming more vulnerable? The way to make others blink is when you are operating from a position of peak financial strength with long(est) staying power. Russia, Venezuela and others will implode first financially before SA will. Perhaps it will take 5 more years of $50 oil to destroy some of their competitors. It would be worth it to them.


----------



## yyz

I wouldn't argue anything above except for Venezuela, a 4th world country that needs no help to implode itself.


----------



## Chris L

AltaRed said:


> SA has never said anything about things being 'rosy'. They simply have said they will protect market share. I would do the same thing and I would do so when my financial reserves are at their peak and can thus stay the course longer than virtually anyone else.
> 
> IF you were SA, would you rather back pedal on market share to sustain price, but at the same time lose revenue (relative to competitors) and become weaker financially (relative to competitors), eventually becoming more vulnerable? The way to make others blink is when you are operating from a position of peak financial strength with long(est) staying power. Russia, Venezuela and others will implode first financially before SA will. Perhaps it will take 5 more years of $50 oil to destroy some of their competitors. It would be worth it to them.


They have to sell twice as much oil to make the same profit as to sell half as much at full pop. This is not as rational as you make it sound.

Why not cut back 10-20% and preserve your reserves and sell for twice as much?

This probably wont end in a way that SA expects it will. It's a gamble on their part and one that is destined to fail in the long run for reasons that aren't yet known. Just my hedge.


----------



## AltaRed

Chris L said:


> They have to sell twice as much oil to make the same profit as to sell half as much at full pop. This is not as rational as you make it sound.
> 
> Why not cut back 10-20% and preserve your reserves and sell for twice as much?
> 
> This probably wont end in a way that SA expects it will. It's a gamble on their part and one that is destined to fail in the long run for reasons that aren't yet known. Just my hedge.


You and a host of others miss the point. IF the Saudis cut back production to support price, the price will stay high enough to encourage everyone else to continue increasing production anyway to fill that gap, which in turn will start to drive price back down again. USA shale production growth alone would add 1 million barrels per day in a year or two. Now the Saudis are hooped again: less production and lower price. What now? Cut back production some more to support price? How many times do they do that? 

The Saudis are NOT going to give everyone else a free ride on their own backs. They are not going to be the sacrificial lamb. If they are going to have to suffer, so is everyone else, and while they are at it, hit the competition hard enough to put some of them out of business. It is a very strategic response on their part and I would be the first to recommend it.


----------



## humble_pie

well, luckily the saudis & their somewhat shakily established royal family have to live on this planet along with everybody else & there are many more pressures upon the royal house of Saud than just the price of oil .each:


----------



## humble_pie

enigmas are the best stories. It's always ambiguity that acts as the grain of sand that produces the pearl.

is CPG nothing but a giant Ponzi scheme utilizing new investors' dollars to pay dividends to old investors in order to keep the wheels & trolleys turning?

does the company lack hedging data beyond the year 2015, so that investors must await Q2 news releases in order to try to get a glimpse of new hedges in place for 2016 & 2017, as one critic keeps posting here?

is the CPG official saying yesterday that the company's dividend has not changed, because that's what company officials always say just before they cut dividends?

time now for the crystal balls. Enigmas are such great stories.


----------



## tkirk62

The company is quite forthright about their hedging program. Check out page eight of this presentation they released.

http://www.crescentpointenergy.com/files/18724.CPG Corporate Presentation July 2015.pdf


----------



## humble_pie

^^

kirk i agree. CPG has always been forthright about its hedging & other aspects of its finances. Thankx for the link.

in the post just upthread (#483) i was merely recapping what the company's enemies keep on saying. The enemies - starting with brian archer - have been so numerous & so vocal over the years that sometimes it's necessary to question their insinuations.


----------



## yyz

AltaRed said:


> You and a host of others miss the point. IF the Saudis cut back production to support price, the price will stay high enough to encourage everyone else to continue increasing production anyway to fill that gap, which in turn will start to drive price back down again. USA shale production growth alone would add 1 million barrels per day in a year or two. Now the Saudis are hooped again: less production and lower price. What now? Cut back production some more to support price? How many times do they do that?
> 
> The Saudis are NOT going to give everyone else a free ride on their own backs. They are not going to be the sacrificial lamb. If they are going to have to suffer, so is everyone else, and while they are at it, hit the competition hard enough to put some of them out of business. It is a very strategic response on their part and I would be the first to recommend it.



I don't think people are missing your point but have a different view,nothing wrong with that. 
And you're statements above are right.But the real question is how long can they play that game,because as you say it becomes a never ending circle right? They are never going to get rid of competition because when prices rise they make more money but more drillers come out. Prices fall and they keep pumping at a lower price,have to subsidize the economy with the reserves and drillers go back into hiding.Competition is never going to outright disappear.
Just like you say above, how many times do they do that? And is there a point (I would say there is) when something cleaner,more abundant etc replaces oil?Then what they have is worth ??


----------



## AltaRed

tkirk62 said:


> The company is quite forthright about their hedging program. Check out page eight of this presentation they released.
> 
> http://www.crescentpointenergy.com/files/18724.CPG Corporate Presentation July 2015.pdf


Good way to present it for those of us unwilling to dig into the financials to find it. 

It would appear to me that if this is current, they have not done any additional hedging since the first quarter (since prices shown are likely from that period). Current futures are in the $60 range now for out years. Will CPG hedge any additional production at that price level?


----------



## sags

Wouldn't the counterparties to these "hedges" be losing their shirts ?


----------



## humble_pie

sags said:


> Wouldn't the counterparties to these "hedges" be losing their shirts ?



no, both parties win.

the original participants in a derivative contract each get to benefit. The seller gets to sell at a price he already knows will be profitable, at least to him. The buyer commits to buy at a future price which his models are showing will also be profitable, at least to him.

after that, speculators enter the trading stream as contracts change hands. But the original participants - in this case, both crescent point & its hedge counterparties - would have or should have settled on prices that are favourable to both of them, as of the date they concluded the transaction.

keep in mind that all circumstances change as time passes. However, a well-prepared hedge will not usually go too far off the rails.


----------



## humble_pie

AltaRed said:


> Current futures are in the $60 range now for out years. Will CPG hedge any additional production at that price level?



there is no way in the world that crescent point or any other company would dream of answering that question. They'll never tip their hand.

after they've hedged, CPG will announce. They always do, they always have, any party has but to look at their website.


----------



## AltaRed

humble_pie said:


> there is no way in the world that crescent point or any other company would dream of answering that question. They'll never tip their hand.
> 
> after they've hedged, CPG will announce. They always do, they always have, any party has but to look at their website.


Of course. It was a rhetorical question...to speculate on what they might do.


----------



## yyz

There has been insider buying lately including the CEO


----------



## al42

yyz said:


> There has been insider buying lately including the CEO


Yup...and quite a bit.

Jul 14/15 Jul 13/15 Turnbull, Gregory George Indirect Ownership Common Shares 10 - Acquisition in the public market 4,000 $23.19
Jul 14/15 Jul 13/15 Saxberg, Scott Direct Ownership Common Shares 10 - Acquisition in the public market 900 $23.07
Jul 14/15 Jul 13/15 Saxberg, Scott Direct Ownership Common Shares 10 - Acquisition in the public market 600 $23.06
Jul 14/15 Jul 13/15 Saxberg, Scott Direct Ownership Common Shares 10 - Acquisition in the public market 1,000 $23.06
Jul 14/15 Jul 13/15 Saxberg, Scott Direct Ownership Common Shares 10 - Acquisition in the public market 1,800 $23.06
Jul 14/15 Jul 13/15 Saxberg, Scott Indirect Ownership Common Shares 10 - Acquisition in the public market 300 $23.03
Jul 14/15 Jul 13/15 Saxberg, Scott Indirect Ownership Common Shares 10 - Acquisition in the public market 300 $23.03
Jul 14/15 Jul 13/15 Saxberg, Scott Indirect Ownership Common Shares 10 - Acquisition in the public market 800 $23.03
Jul 13/15 Jul 10/15 Saxberg, Scott Direct Ownership Common Shares 10 - Acquisition in the public market 2,000 $24.07
Jul 13/15 Jul 10/15 Saxberg, Scott Direct Ownership Common Shares 10 - Acquisition in the public market 2,100 $24.07 - See more at: https://www.canadianinsider.com/com... | Crescent Point Energy#sthash.QxuVYBv2.dpuf


----------



## blin10

insider buying doesn't mean anything, not sure why people always keep mentioning it


----------



## OptsyEagle

Well I would say it is pretty safe to say that with this insider buying that Scott Saxberg is not currently thinking that CPG will need to cut their dividend. That has to mean something for a $23 stock with a $0.23 monthly dividend.


----------



## blin10

OptsyEagle said:


> Well I would say it is pretty safe to say that with this insider buying that Scott Saxberg is not currently thinking that CPG will need to cut their dividend. That has to mean something for a $23 stock with a $0.23 monthly dividend.


it means absolutely zero... if stuff like that mattered everyone would be all over that information and loading up their houses on margin


----------



## Synergy

yyz said:


> There has been insider buying lately including the CEO


That is a sign of a good captain!, willing to go down with the ship :biggrin:


----------



## humble_pie

? aren't we getting it backwards, though. It's insider *selling* that's meaningless, they say. Insider *buying* means everything. There's even an insider transaction analytical service, whose owner Ted Dixon writes regularly for the globe & mail, that tracks insider transactions with special attention to the buy side.

yesterday's buying by CEO scott saxburg looks like emergency window dressing to me. Shares purchased yesterday cost saxburg less than $24k, an amount that, for him as CEO, would not be significant.

the action looks like a response to yesterday's bombardment of phone, fax & e-mail messages from retail investors, all nervously asking CPG the same question. Are U Cutting The Dividend.

the CEO purchase did not have to be reported for at least 10 days. The fact these purchases were reported so extremely rapidly & so diligently underscores how they were meant as reassuring window dressing. 

CPG appears to be standing behind its e-mail to al42, No. 473 upthread, which basically confirmed that everything was business as usual & yesterday's price & volume paroxysms were mob outbreaks from institutional trading desks.


----------



## AltaRed

Insider buying by executives can mean 3 additional things: 1) there is a belief the stock is undervalued, 2) the executive needs to buy more to meet minimum contractual commitments, or 3) options/RSUs are about to expire. It is best to ignore insider buying for the most part UNLESS the research has been done (if one can dig that deep) to really know the reason why.


----------



## humble_pie

AltaRed said:


> Insider buying by executives can mean 3 additional things: 1) there is a belief the stock is undervalued, 2) the executive needs to buy more to meet minimum contractual commitments, or 3) options/RSUs are about to expire. It is best to ignore insider buying for the most part UNLESS the research has been done (if one can dig that deep) to really know the reason why.



it looks like saxburg's reason to buy yesterday was # 1) above. Plain & simple, he thought the stock was undervalued.

it seems clear to me. Top crescent point management isn't agreeing with altaRed's bearish call for persistent low $40 oil, ruthless destruction of competitor markets by the royal house of Saud & a 2-year price drought in fossil fuel pricing!


----------



## OptsyEagle

blin10 said:


> it means absolutely zero... if stuff like that mattered everyone would be all over that information and loading up their houses on margin


Would you buy over $200,000 worth of stock if you were thinking the dividend would be cut soon? Of course not.

I am not saying that it will guarantee you make a profit on the stock, but back thread a little, posters were discussing how CEOs will always defend their dividend right up until they cut it. That is of course true, but at least in this case a shareholder can be sure that this CEO is certainly not doing that at this time. He may in the future but not now.

Therefore it means a great deal more then zero.


----------



## humble_pie

Synergy said:


> That is a sign of a good captain!, willing to go down with the ship :biggrin:



nae nae laddie, mr. saxburg could easily have put on a collar with his share purchase, so that effectively he could collect the dividend for a while but get out of the stock position before a set date with no loss whatsoever. No gain either, but that's what a collar will do to ya during these hot summer days at zero interest rates ...


----------



## tkirk62

blin10 said:


> it means absolutely zero... if stuff like that mattered everyone would be all over that information and loading up their houses on margin


It definitely does not mean zero. There have been many empirical studies done showing that insiders achieve higher returns. The study I'm linking to actually concludes the same as humble_pie, that insider buying is more informative than insider selling. It's not a foolproof system, which is the reason people are not "loading up their houses on margin" but it is a piece of information which should be examined in addition to all other available inormation.

http://lsvasset.com/pdf/research-papers/Insider-Trades-Informative.pdf


----------



## AltaRed

humble_pie said:


> it seems clear to me. Top crescent point management isn't agreeing with altaRed's bearish call for persistent low $40 oil, ruthless destruction of competitor markets by the royal house of Saud & a 2-year price drought in fossil fuel pricing!


I don't recall ever saying $40 oil over the long term but I believe today's forward futures in the circa $50-60 range for longer than we will continue talking about it here is closer to the truth than not. I do believe $50-60 oil will depress production in several areas, including some OPEC countries where they cannot invest enough to maintain current levels of production. Anything significant in the North Sea is also dead in the water at those levels as is production sustainability in many of the banana republics that have no financial reserves to begin with.


----------



## humble_pie

AltaRed said:


> I don't recall ever saying $40 oil over the long term but I believe today's forward futures in the circa $50-60 range for longer than we will continue talking about it here is closer to the truth than not. I do believe $50-60 oil will depress production in several areas, including some OPEC countries where they cannot invest enough to maintain current levels of production. Anything significant in the North Sea is also dead in the water at those levels as is production sustainability in many of the banana republics that have no financial reserves to begin with.



CEO saxburg's buy actions yesterday would suggest that crescent point has a somewhat more bullish view than yours, altaRed, but this difference is precisely what makes for the rich value that the range of the projections can offer to us small retail investors who happen to be looking on.

there could be other views by other respected sources - i think it was perhaps keith schaefer clocking in at $40 oil for 2 years i was thinking of? - but altogether the ensemble of different views from knowledgeable & serious sources including yourself is a rich resource for small investors.

no one knows how things will work out, only time will tell. But i'm sure of 2 things. First, that the opportunity to hear such a range of views from credible sources is very precious indeed. Second, that the internet has made all this information possible, but really only in the recent decade.


----------



## Killer Z

How cheap does this one need to get before one can feel comfortable pulling the trigger? Damn. Talk about trying to catch a falling knife .....or maybe a falling battle axe.


----------



## ChillbroSwaggins

Killer Z said:


> How cheap does this one need to get before one can feel comfortable pulling the trigger? Damn. Talk about trying to catch a falling knife .....or maybe a falling battle axe.


Just bought another 100 shares with an ACB of $23.75. Considering all the acquisitions and insider buying happening with this company I feel pretty comfortable diving in with a smallish position. As one of the largest players in the game I don't see them going anywhere anytime soon. I may have to hold the shares for awhile to see a return but I'm more than willing.


----------



## blin10

CEO has no control over where oil price is going, if oil keep falling they WILL cut their dividend... over the last 15 years of investing, I've seen too many companies going bust while "CEO is loading up shares so I feel confident".. not to mention, even CEO in a lot of cases does not know if company will be cutting their dividend or not, there are a lot of other people in the company that make collaborative decision... either way just trying to help, i'm not going to argue this further, back to the topic




OptsyEagle said:


> Would you buy over $200,000 worth of stock if you were thinking the dividend would be cut soon? Of course not.
> 
> I am not saying that it will guarantee you make a profit on the stock, but back thread a little, posters were discussing how CEOs will always defend their dividend right up until they cut it. That is of course true, but at least in this case a shareholder can be sure that this CEO is certainly not doing that at this time. He may in the future but not now.
> 
> Therefore it means a great deal more then zero.


----------



## Synergy

Killer Z said:


> How cheap does this one need to get before one can feel comfortable pulling the trigger? Damn. Talk about trying to catch a falling knife .....or maybe a falling battle axe.


Just imagine if they have to cut the dividend!


----------



## humble_pie

the CPG dividend is indeed at risk, which means the share price is at risk, so now is not a time for souls to buy crescent point without some kind of get-out-of-jail-free pass.

couple days ago i bought 1200 shares with a collar. A good velcro-closed rainproof collar. It's my goojf pass.

no matter what, i'll be out of those shares at 26. They cost me 26.30, including the velcro goojf pass. I locked in a risk-free 2.76 dividend yielding just north of 10%, for as long as the divvy payout continues. Or for the next 30 months. Whichever first occurs.


----------



## Killer Z

....and the carnage continues ........so tempted to average down on this one but cannot buy something with a near 14% dividend. Everyone is tumbling out in fear that the dividend will be cut.


----------



## humble_pie

button up you collar.

in times like these a waterproof velcro closure collar will defend & insure many stocks.

not all - collars in canadian banks are not looking promising. But crescent point has immaculate, orderly collars on sale ...


----------



## Jon_Snow

Been adding, adding, adding on the way down. Foolish? I prefer the term "confident".

We will see.


----------



## Killer Z

Jon_Snow said:


> Been adding, adding, adding on the way down. Foolish? I prefer the term "confident".
> 
> We will see.


Jon Snow, care to share the fundamentals of your confidence here? I am asking out of interest, not in opposition of your viewpoint.


----------



## blin10

Jon_Snow said:


> Been adding, adding, adding on the way down. Foolish? I prefer the term "confident".
> 
> We will see.


i hope you diversify, you seem to be all in into few stocks


----------



## Jon_Snow

blin10 said:


> i hope you diversify, you seem to be all in into few stocks


Oh, there is no doubt CPG is my largest SINGLE holding, but despite that I'm quite happy with my diversification. Big chunks of VTI, XIU, XRE, CPD, XSB...big positions in some other stocks too...Bell, Disney, good ol' J&J.

Not gonna lie though, been tough to watch my "oily" names though. I suspect a year from now things will look much better.

I do appreciate the concern though.


----------



## zylon

I forget who it was - maybe Long Run X (LRE) when they cut the dividend, the price went up.

Market doesn't like uncertainty; if there's widespread expectation of a divy cut, when it happens the uncertainty disappears.

It's quite possible that when CPG cuts dividend, they'll be doing everyone a favour.

-not an owner .. stink bid in 25% lower.


----------



## doctrine

Despite the drop in the stock price, CPG is only now starting to reach actual book value per share. It isn't trading at a discount. Not many large oil producers are.


----------



## leeder

It's interesting to see Scott Saxberg buying a bunch of shares in recent days/weeks. To me, that shows management confidence of turn around. 

I exited this company last December in the low $30 range. I'm now extremely interested in dipping my toe back in. However, it might not be a long term holding. My gut feeling is that, while the yield is high, Saxberg won't cut the dividend.


----------



## HaroldCrump

I wonder if some of these blue-chip Canadian oil stocks sell-offs are in anticipation of proved reserves writedowns.
CPGs latest reserves from their website is below










We know for a fact that oil futures are less than 50% lower than in mid 2014.
If this continues, writedowns are inevitable.

I believe there are SEC rules require a 5 year development timeframe for proved reserves.
Given that vast majority of Canadian/Bakken oil producers are revising their drilling/development plans, potentially several MMBOEs may have to be written off.

There is too much going on in the world right now to isolate any individual factor in a stock sell off, but reserves writeoff is yet another thing to watch out for.


----------



## Flash

HaroldCrump said:


> I wonder if some of these blue-chip Canadian oil stocks sell-offs are in anticipation of proved reserves writedowns.
> CPGs latest reserves from their website is below
> 
> 
> 
> 
> 
> 
> 
> 
> 
> 
> We know for a fact that oil futures are less than 50% lower than in mid 2014.
> If this continues, writedowns are inevitable.
> 
> I believe there are SEC rules require a 5 year development timeframe for proved reserves.
> Given that vast majority of Canadian/Bakken oil producers are revising their drilling/development plans, potentially several MMBOEs may have to be written off.
> 
> There is too much going on in the world right now to isolate any individual factor in a stock sell off, but reserves writeoff is yet another thing to watch out for.


Can you please explain? Why do the reserves need to be written off? Wouldn't keeping them and then sell them when the boom happens in the future make perfect sense? I feel I'm missing something

I'm thinking of buying a few more shares if the price stays below 20. CPG has great assets and I'm sure they will rebound very nice when the price of oil goes back up


----------



## AltaRed

Flash said:


> Can you please explain? Why do the reserves need to be written off? Wouldn't keeping them and then sell them when the boom happens in the future make perfect sense? I feel I'm missing something


Reserves are not an absolute. Whether they can be economically recoverable depends on reservoir quality, technology, recovery methods, facilities in place to extract said reserves, innovation and commodity price. Typically only 10-60% of the actual OOIP (original oil in place) can be recoverable over time. The only way the regulator/securities commission can ba sure everyone is playing by the same rules is to impose a very complicated set of conditions under which oil barrels can be counted (economically urecoverable reserves in ground being a valuable asset). That said, establishing these numbers is as much an art as a science and there is always room for interpretation. They should never be considered absolutes

Hence if commodity price at the end of 2013 was $100, it would be relatively certain that X barrels could be economically recovered over time. If the price dropped to $60 at the end of 2014, it is pretty clear some of those barrels that were economically recoverable at the end of 2013 are no longer recoverable at the end of 2014. Those barrels have to be written off the books for this year. If at the end of 2015, oil price went back to $100, those 'written off' reserves could be added back to the books.

Assuming that every 3rd party technical firm that evaluates a company's reserves each year is not cooking the books (and there is good reason for a technical firm to keep its reputation), a shareholder can gain a perspective of how good a company's reserves are by the writeoffs (or additions) that can occur each year and why. A company who had to write off a lot of reserves at the end of 2014 is one that has more 'marginal' reserves than a company who wrote off very few reserves. That speaks to quality of reserves and possibly conservatism. I would prefer to own the latter since that company is likely to be less likely to have to shut off the lights than the former in a prolonged downturn.


----------



## Pluto

CPG is hitting a lower low (compared to the Dec low) while oil itself is at a higher low indicating CPG is over reacting. Basically a buying opportunity with a nice dividend while one waits for it to blow over. 

I don't think being fearful of possible write downs will help the investor. The larger picture is the world needs oil, and the over production will blow over, and prices rise again. That makes any write down temporary. And the fear of write downs makes the stock depressed, which in turn is a buying opportunity.


----------



## AltaRed

If year end 2015 oil prices are similar to year end 2014 oil prices, there should not be any write downs resulting from commodity price (albeit there can be other reasons for technical revisions up or down). I simply suspect investors are capitulating and/or worried about decreasing value of remaining hedges. 

There is just little reason to be in oils at the moment other than from bottom feeders speculating on a bottom. My one and only partial holding (CNQ) is in no better shape.


----------



## tygrus

This stock is a tempting pickup at these levels. Its trading near to only a few years after its inception. And it states they have a good chunk of 2015 production hedged in the $90+ range and their main plays are away from the expensive oil sands stuff in the lighter/sweeter Bakken. Tempting 14% divi. Trying to be brave when others are fearful is hard.


----------



## AltaRed

tygrus said:


> This stock is a tempting pickup at these levels. Its trading near to only a few years after its inception. And it states they have a good chunk of 2015 production hedged in the $90+ range and their main plays are away from the expensive oil sands stuff in the lighter/sweeter Bakken. Tempting 14% divi. Trying to be brave when others are fearful is hard


It is nowhere near the company it was near its inception, both in assets and market float. CPG is one of those companies you cannot do much to compare past and current metrics.


----------



## AltaRed

2Q results just announced on their website. A capex cut, a cut in dividend to 10 cents/month and suspension of their DRIP. Prudent management decision. Their hedge book is still on track for this year, but falls to ~32% of 2016 production at about $83CAD (about $64USD). Likely makes no sense to hedge any more than that at lower prices than that.


----------



## Moneytoo

AltaRed said:


> A capex cut, a cut in dividend to 10 cents/month and suspension of their DRIP.


But synthetic DRIP (through brokerage) should still work, non? I have 176 shares, was expecting they'll DRIP me two shares this month... *sigh*


----------



## Killer Z

It will be very interesting to see how the stock price reacts to the dividend cut. Could actually go up .......


----------



## 0xCC

It's funny, I was reading a TD Action Notes report last week about Crescent Point (the July 31 Morning Action Notes if anyone want to look it up). The title of the report on CPG was "A Yield Of Their Own". The analyst said that the market seemed to be pricing in a "50% (or more)" dividend cut (this morning's cut is 56.52% cut (from 23 cents a month to 10 cents). The report stated "We do not see an imminent need to address the dividend", "Dividend cut does not materially improve the baseline business". The report goes on to reluctantly do an analysis of a 25% dividend cut and a 50% dividend cut and what impact that would have on the financials of the company.

This morning they have a new report out on CPG and they have reduced their target price by $2 (from $40 to $38). The new report states "Although this move came earlier than we anticipated, the decision is financially prudent."

The market seems to like the move this morning, back up over $18 while other energy names are falling.


----------



## OptsyEagle

I thought they would have held out until the end of this year, especially since the CEO was buying stock very recently, but I do recall mentioning many pages back (around January) that these dividend cuts can be self fulfilling. I suspected that the market would eventually negate their hedges since they mostly disappear after a year or so and therefore have no long term benefit. Without the hedges the investment community would start to get concerned about a dividend cut. This would cause the stock to decline. Eventually, once CPG realized that they were getting next to no benefit (stock price wise) from maintaining a high dividend, they would elect to cut it. They have to come up with growth money somewhere. If they can't issue stock (due to low price) and really do not want to take on debt, the only other alternative was internal cash flows. The quickest way to create more cash flow for investment is to stop paying it out to investors.

Anyway. Oil prices will determine the winning or losing on this investment, and your entry price. The dividend was really only an accounting entry for your books.


----------



## jamesko

cpg is holding up pretty well after the dividend cut compare to the other oil plays


----------



## My Own Advisor

This decision was just good management. Sometimes a dividend cut is a very good thing.


----------



## GoldStone

Energy dividends 'a big farce'



> There are ... some oil patch veterans who believe the current environment will give cause for energy dividends to nearly go the way of the dodo. Rafi Tahmazian, partner and energy portfolio manager with Canoe Financial, told BNN on Thursday the rise of dividend-paying entities in Calgary starting in 2009 “has been a big farce.”
> 
> He argues companies were convinced to offer dividends by their banks in order to send their share prices higher, even if the decision put significant pressure on their balance sheets. Since the crash in crude oil prices began in earnest last October, Tahmazian said those dividends are now “kicking them in the teeth.”
> 
> “The reality is [companies] should never have been doing a divvy if they were spending multiples of cash flow to grow,” Tahmazian said, adding the only type of dividends that are sustainable in the present environment are those from companies with a payout ratio of 100 percent or lower such as Whitecap Resources, PrairieSky Royalty and Cardinal Energy. Other producers, he said, would be wise to spend more money on growing their assets, especially with debt becoming such a challenge for dividend-paying companies.
> 
> “Get rid of those divvys now,” Tahmazian said. “Don’t bring them back.”


----------



## My Own Advisor

Interesting GoldStone so thanks for sharing.

I love dividends, yes, but as long as I get good, long-term total return (which I plan on...) then dividends or not, I'll continue to hold this company.


----------



## doctrine

The inevitable has occurred. I haven't seen any oil companies with projections below $45 WTI yet. The forward price curve has been obliterated. As well, the fall is a period of seasonal weakness as demand drops and production continues. Wouldn't be surprised to see dividend cuts accelerating. If oil rebounds, the majors will be okay but I think if oil heads into the $30s then you will even see the big players make dividend cuts.


----------



## fatcat

My Own Advisor said:


> This decision was just good management. Sometimes a dividend cut is a very good thing.


especially since they are now paying only 6.8% :biggrin:


----------



## Moneytoo

A year ago: 2014-06-07, 04:45 PM



Moneytoo said:


> But I still dont see the point of buying index etfs or banks or energy stocks until next year if it has to be... Well maybe CPG - at least they pay big dividends


ROFL


----------



## humble_pie

GoldStone said:


> Energy dividends 'a big farce'





> There are ... some oil patch veterans who believe the current environment will give cause for energy dividends to nearly go the way of the dodo. Rafi Tahmazian, partner and energy portfolio manager with Canoe Financial, told BNN on Thursday the rise of dividend-paying entities in Calgary starting in 2009 “has been a big farce.”
> 
> He argues companies were convinced to offer dividends by their banks in order to send their share prices higher, even if the decision put significant pressure on their balance sheets. Since the crash in crude oil prices began in earnest last October, Tahmazian said those dividends are now “kicking them in the teeth.”
> 
> “The reality is [companies] should never have been doing a divvy if they were spending multiples of cash flow to grow,” Tahmazian said, adding the only type of dividends that are sustainable in the present environment are those from companies with a payout ratio of 100 percent or lower such as Whitecap Resources, PrairieSky Royalty and Cardinal Energy. Other producers, he said, would be wise to spend more money on growing their assets, especially with debt becoming such a challenge for dividend-paying companies.
> 
> “Get rid of those divvys now,” Tahmazian said. “Don’t bring them back.”




extracting only this particular extreme quote & nothing else out of a well-balanced report by BNN journo Jameson Berkow is a disservice to cmf forum readers imho.

berkow names 3 calgary oil analysts who approve of the dividend cut. The reporter says he cannot name 3 more analysts who are anticipating dividend cuts soon in baytex, enerplus, surge, TORC, journey & penn west. For baytex, this would be a 2nd divi cut in a row, he notes.

as for rafi tahmazian, apart from worshippers of former dragons' den panelists who for some reason have decided to kneel in adoration before Canoe funds, the only role he's playing in berkow's well-balanced piece of reportage is spokesman for the anarchist extreme. What kind of nonsense is that, that "the banks" conspired in 2009 to convince energy companies to pay high dividends? next thing one knows, tahmazian will be sounding exactly like zerohedge.

it's common for journos to include an anarchist basher as an extreme voice, but usually readers know to take these outlier opinions with a big grain of salt. At least look at the whole video/article, not just the extreme fragment that goldstone has selected for extraction.

btw BNN says scott saxberg will be on at 11:30 this AM to discuss the dividend cut.

as fatcat says, the divi yield in CPG is still north of 6%. What's to kvetch about? dividend cuts are flying everywhere like confetti these days, times are hard, jobs are being lost, a recession is either here or it's coming, all that is happening is that a typical market correction is underway.

markets always break downwards far faster than ever they painstakingly climbed upwards. Parties who cannot tolerate these broad market swings should probably not be in stocks at all.


----------



## GoldStone

Rafi Tahmazian speaks common sense. AltaRed has been saying pretty much the same thing here on CMF for many years.

O&G companies that constantly raise new capital while paying high dividend is like Dr. Jekyll and Mr. Hyde.

Dr. Jekyll: Dear investors! We have this pile of excessive capital. We don't need it to grow the business. Please take the dividend and spend it as you please.

Mr. Hyde: Dear investors! Please buy our secondary equity and debt. We need more capital to grow the business.

So what is it? Do you need more capital or do you not? It's a big farce indeed.


----------



## humble_pie

wondering why are you suddenly speaking out only now? where were you with your timely farce warnings a few months ago?

it's a farce to talk about banks conspiring in 2009 to egg on energy companies to pay dividends. Talk like that is only supposed to come from creeps like zerohedge.

perhaps we should talk about the ACQ fortunes of some parties very close to home instead? close to home as in the mirror?


----------



## blin10

wow... keeps sinking, how low can this go


----------



## jollybear

If only we knew!


----------



## jerryhung

It hurts
-6% today?

DARK Red in Heatmap... why...geez


----------



## fatcat

jerryhung said:


> It hurts
> -6% today?
> 
> DARK Red in Heatmap... why...geez


maximum pessimism ?


----------



## HaroldCrump

humble_pie said:


> as for rafi tahmazian, apart from worshippers of former dragons' den panelists who for some reason have decided to kneel in adoration before Canoe funds, the only role he's playing in berkow's well-balanced piece of reportage is spokesman for the anarchist extreme. What kind of nonsense is that, that "the banks" conspired in 2009 to convince energy companies to pay high dividends? next thing one knows, tahmazian will be sounding exactly like zerohedge.


Oh wait...hold the phone...Rafi Tahmazian is calling the bottom for oil & declaring an end to the energy sector rout - http://bit.ly/1DToKkE
His top picks are Kelt & Advantage.

I haven't watched Rafi on TV before, but found it interesting that he showed up in a T-shirt and chewing gum (it's visible near the end of the video, tucked away behind his right jaw)


----------



## GoldStone

humble_pie said:


> wondering why are you suddenly speaking out only now? where were you with your timely farce warnings a few months ago?
> 
> it's a farce to talk about banks conspiring in 2009 to egg on energy companies to pay dividends. Talk like that is only supposed to come from creeps like zerohedge.
> 
> perhaps we should talk about the ACQ fortunes of some parties very close to home instead? close to home as in the mirror?


I am not "speaking out". I shared a thought-provoking article, that's all there is to it. My next post was a courtesy response to you. It would be impolite to leave your post #538 without a reply. I don't plan to linger in this thread for long, as I have no dog in this fight.

I'm not sure what ACQ has got to do with the issue at hand. But if you are curious, I sold ACQ on July 20 at $38. Sold COS within 5 minutes at $8. The loss in COS offset the gain in ACQ. I didn't make any money on the two combined positions. But I didn't lose any either which is great. Rule #1 and Rule #2. Learned a few priceless lessons in the process.

Speaking of fortunes and mirrors, can I mention Valeant? That company is a great example of sensible capital allocation. They raise capital all the time to do their serial acquisitions, but they do it smartly. They strongly prefer to raise debt rather than dilute their shareholders (although they do issue equity when their leverage ratio becomes too high). More importantly, they don't pay a dividend while they raise more capital. It wouldn't make any sense to pay a dividend when they have so many opportunities to deploy capital. To me, this is just common sense. Unfortunately, it's not very common in the oil patch.


----------



## peterk

Ouch. I thought I was doing good to get in at $22.


----------



## humble_pie

HaroldCrump said:


> Oh wait...hold the phone...Rafi Tahmazian is calling the bottom for oil & declaring an end to the energy sector rout - http://bit.ly/1DToKkE
> His top picks are Kelt & Advantage.
> 
> I haven't watched Rafi on TV before, but found it interesting that he showed up in a T-shirt and chewing gum (it's visible near the end of the video, tucked away behind his right jaw)




looks like canoe is paying a lot of $$ for top-notch PR specialists who are obtaining widespread media coverage for them these days.

this, of course, doesn't mean that a heavily promoted subject has anything real to say for himself ... ranting about farces & alleged 2009 bank conspiracies with energy companies is a tad embarassing ...


----------



## OurBigFatWallet

Saxberg was on BNN earlier today discussing the dividend cut: http://www.bnn.ca/News/2015/8/14/Crescent-Point-CEO-defends-dividend-cut.aspx


----------



## humble_pie

CPG has always been a lightning rod, attracting far more than its share of scoffing & jeering. Company is a farce, the drive-by artists allege. A Ponzi scheme, they shriek.

yet i fail to see how the canadian chartered banks are behaving any differently. The banks, too, keep continuously offering new issues of preferred shares. Regularly, every few months, our top chartered banks tap the markets to harvest new capital, often selling the new preferred share issues to US institutional investors.

meanwhile the same canadian banks pay generous dividends to retail investors holding their common shares. The banks are also DRIPPing dividends.

how do the banks' practices differ from crescent point, when all is said & done? i'm wondering to myself how come canadian banks are not also denounced as farces, scandals & ponzi scheme promoters ...


----------



## GoldStone

humble_pie said:


> yet i fail to see how the canadian chartered banks are behaving any differently.


I don't believe this statement for one second. each:

Great theater, though.


----------



## humble_pie

HaroldCrump said:


> Oh wait...hold the phone...Rafi Tahmazian is calling the bottom for oil & declaring an end to the energy sector rout - http://bit.ly/1DToKkE
> His top picks are Kelt & Advantage.
> 
> I haven't watched Rafi on TV before, but found it interesting that he showed up in a T-shirt and chewing gum (it's visible near the end of the video, tucked away behind his right jaw)




cool! all he has to do now is arrive on a motorcycle

will he be able to pronounce sacheverellsitwell, though


----------



## Westerncanada

Unrelated to the last few comments. . But have moved a large position into CPG today and hope to do so again in November after either a poor quarter or/and dividend cut. 

Buying these at sub $15 would be a fantastic turn around play


----------



## JordoR

Just reached below $16 really since inception, seeing a new bottom every week on this one. I'm happy with the div cut (15% wasn't sustainable) and would probably be happy with a total suspension because of the current climate. 

Looking to average down and buy some more of this. Probably buying some more at $15.5, and then again either below $15 or slightly above $16 depending on how this reacts in the next bit. It's a large holding of mine and I can lower my ACB by nearly $15 buying now.


----------



## My Own Advisor

Same. Might dip in for a bit around $15 if it ever gets there. 

I wonder when oil will rebound? I wonder if and when it comes back, it will roar...


----------



## jerryhung

I gave up and sold at $16 today (-40% loss)

Don't want this hanging over my head EVERY SINGLE DAY. It goes down whether market is up or down (-10% in last 5 days), I had hoped it'd stabilize after ER (it reached $18.xx)

MAYBE... one day, few months/years down the road, when oil stabilizes, I may pick it up again (doubtful though)


----------



## Moneytoo

Yay it DRIP-ed me 2 more shares yesterday, now have 178 shares at the average cost of $35.35, 50%+ down, thinking whether/when to buy 100 more shares... 

(It was more than 2% of our total portfolio initially, now less than 1%)


----------



## blin10

dipping toes in this one as well... gotta buy when blood on the streets


----------



## blin10

My Own Advisor said:


> Same. Might dip in for a bit around $15 if it ever gets there.
> 
> I wonder when oil will rebound? I wonder if and when it comes back, it will roar...


who knows when, but when oil will move, these big companies will come back up first


----------



## JordoR

I'm in for 150 more shares, lowers my average down to $30. I'll wait on another drop or small gain before another 150.


----------



## Westerncanada

JordoR said:


> I'm in for 150 more shares, lowers my average down to $30. I'll wait on another drop or small gain before another 150.


I also bought here at $16.. but will hold off until heir q3 earnings come out to purchase further. 

I dont know how its possible for these guys not to bleed deeper given oils outlook


----------



## humble_pie

idk if it's any comfort, but the $250k that CEO scott saxburg spent just prior to the dividend cut to buy CPG was by no means his only purchase within the past year.

i was glancing at the insider record & noticed he was buying in the $35 range, then $32 & $30 in late 2014. Then onwards & downwards in 2015. Last in the $22 range.

these are suggesting to me that either mr saxburg knows what he's doing & he has great hope, or else he's just about the dumbest crazy CEO i've seen lately


----------



## AltaRed

Or he had options expiring....


----------



## humble_pie

a number of other insiders also had the same options but they weren't buying


----------



## jerryhung

$14.98 low today

WOW...speechless, can only say glad I sold yesterday $16, and cut my 40% losses


----------



## JordoR

Yeah can't believe below $15, I'm not too upset though since it's a long term hold for me. I just see this as a great buying opportunity. I'll keep an eye out as I still want to buy another 150, whether I do it at 14, 14.5, etc... depending on how this slides.


----------



## thepitchedlink

Getting ready to have a look at this one too....my other oils are down 40%....trying to decide if it's better to average down on them or get in on a new one.....


----------



## blin10

yah pretty intense out there... this market is def not for the weak hands


----------



## tkirk62

Finally decided to take the big tax loss. Hoping though that it is in this range or lower in 31 days so I can get back in.


----------



## blin10

why you people selling this when oil is at 40$? this is getting close to the bottom, oil ain't going to 0... physiology of human mind, buying when oil is at 100 and selling when oil is at 40


----------



## tkirk62

blin10 said:


> why you people selling this when oil is at 40$? this is getting close to the bottom, oil ain't going to 0... physiology of human mind, buying when oil is at 100 and selling when oil is at 40


I sold with the intention of buying it again in 31 days. While it may be a little bit higher then, I had over $7K of tax loss I could claim. That alone should make up for any upward movement in the price over the next month. Then I get back in, and hold because I do like the company.

Tax loss selling can be a useful strategy when deployed correctly


----------



## Westerncanada

blin10 said:


> why you people selling this when oil is at 40$? this is getting close to the bottom, oil ain't going to 0... physiology of human mind, buying when oil is at 100 and selling when oil is at 40


Im buying... all day at $14.50? Yes please


----------



## Ponderling

Well I have about 220 shares in CPG -bought a few years ago -that merrily was throwing off dividends. CPG divs are no longer as lucrative, so no surprise the stock sank, with the cut div and low oil prices. 
So I took the dividend cash that this and other stocks had spun off in the last quarter in the non registers account these holdings live in and bought another 180 CPG shares.

Most of my other funds are in stuffed full RRSP and TFSA accounts as ETF's of broad indexes.
The stock of my employer (some in an RRSP, some not) is dull ( typically 7% per year) and spins half or that as dividends. The holding amount I have entitles me to a cut of the management bonus pool that makes up about 15% of my annual wage income. 

So my non registered account which comprises about 6% of our overall worth, with 14 stocks in it at the moment is where I have my investing 'fun'. 
If I did not buy at the bottom, oh well. 
These holdings can sill make a good loss, in the sense it is deductible against taxable gains, if I sell in the next while. 
I am a bit overweight in L since it bought up SDM, so selling CPG to balance the L cap gain would work for me.

But also there is the prospect for upside in the longer term CPG that is likely more fun.
Or at least a learning experience, that, if it goes wrong it is not going to sink me for the number of shares I am in in this stock.


----------



## CPA Candidate

If the current price scenario remains in place at year end, I think it's time for CPG to scrap the dividend altogether. This is no environment for any oil company with debt to be paying money out. I say that as a shareholder. The game is survival. The asset value of oil companies is far lower than what's currently on the balance sheet and year end will bring another wave of impairments.


----------



## JordoR

CPA Candidate said:


> If the current price scenario remains in place at year end, I think it's time for CPG to scrap the dividend altogether. This is no environment for any oil company with debt to be paying money out. I say that as a shareholder. The game is survival. The asset value of oil companies is far lower than what's currently on the balance sheet and year end will bring another wave of impairments.


I agree, as a shareholder. Tossing the amount of money they currently are at dividends is foolish when the price per barrel is so low.


----------



## Canuck

so tempted to sell for the Capital loss & buy in again in 30 days.

tkirk62 makes a good point that the tax savings may far outweigh any movement in the short term.

I've got a 'gulp' $25,000 loss on this now. I did make close to $17,000 in dividends though since I've owned it. Small consolation.


----------



## OnlyMyOpinion

Canuck said:


> so tempted to sell for the Capital loss & buy in again in 30 days. tkirk62 makes a good point that the tax savings may far outweigh any movement in the short term. I've got a 'gulp' $25,000 loss on this now. I did make close to $17,000 in dividends though since I've owned it. Small consolation.


Do you already have capital gains built up to offset the loss, or do you have gains that you could crystalize?
(I ask because this is something we did last week, not with CPG though - we don't own any oils)


----------



## Canuck

yes, I've made out like a bandit on New Flyer, almost 25G, and was thinking of selling that one, or WSP Global, which I'm up almost as much.

My hesitation is that those two stocks are great because they aren't tied to the Canadian economy, unlike so many of my others. But a gains a gain...


----------



## humble_pie

every now & then, when times get tense, i go over to stockhouse to see how the day traders are battling it out & sure enough, this evening things are looking ripe on the cpg board. I get the feeling that capitulation is near.

it's when they start calling for the CEO to be fired or sued or both that the bottom of the trough becomes more visible, goes my belief.

there are only a couple voices bawling for scott saxburg's head so imho not quite enough yet. They are going for the analysts, though. They're razoring up those BNN types that have been liking crescent point. Stockhouse reads like the french revolution, they're calling for the analyst guillotine in the public square now.


----------



## londoncalling

I love that indicator. I have never used it but in hindsight it is definitely just as good or better than any others I have seen. I have no plans to add to my micro position but am watching the market with greedy anticipation right now.

GLTA


----------



## slinger

Got in at $17.92. It has since declined 21%. Looking to average down soon and pick up some more. I don't believe the magnitude of the stock price drop is warranted. CPG is a low cost producer who is still making money at $40/barrel. They are one of the better companies at cutting capital expenditure and now with the dividend cut, it is in a better position than most in the energy sector. There is no doubt they will survive and when the oil supply glut ends and crude stockpiles dwindle (and they eventually will), investors who took advantage of this buying opportunity will see some very significant returns.


----------



## doctrine

Don't kid yourself; they might be making operating money at $40, but they are not covering cap-ex and their dividend right now. That's with their hedges, which will continue to roll off. It ~might~ be sustainable at $50 if the Cdn dollar is favourable and they actually get WTI prices in the Prairies and the forward price curve is reasonable. At $35, prepare for elimination of the dividend which would be the correct move. See Baytex, which is the canary in the coal mine for the mid-caps as their debt level is higher than CPG, so they are forced to act first.


----------



## Canuck

doctrine said:


> Don't kid yourself; they might be making operating money at $40, but they are not covering cap-ex and their dividend right now. That's with their hedges, which will continue to roll off. It ~might~ be sustainable at $50 if the Cdn dollar is favourable and they actually get WTI prices in the Prairies and the forward price curve is reasonable. At $35, prepare for elimination of the dividend which would be the correct move. See Baytex, which is the canary in the coal mine for the mid-caps as their debt level is higher than CPG, so they are forced to act first.


well Baytex just announced a suspension tonight.


----------



## besmartrich

Canuck said:


> well Baytex just announced a suspension tonight.


Yup. That was definitely a good move. I purchased CNQ a couple of days ago but keeping my eyes on good smaller O&G like BTE and CPG. So many deals out there lately.


----------



## My Own Advisor

Deals to be had for sure...you just wonder how low things can go!? CPG DRIPped the other day which was nice. 

CNQ is also coming down. I think CNQ, SU, IMO and HSE will be fine. 

The mid-cappers like CPG, COS, etc. will likely need to eliminate their dividend to survive.


----------



## HaroldCrump

Regarding COS, the Syncrude project is now *losing $6 per barrel produced*.


----------



## slinger

The bottom line is that CPG will survive this low price environment. I would not be devastated by a dividend cut since that would tidy up the balance sheet some more. CPG ain't going anywhere and with the stock price at 1/3 of its 52 week high, it is a terrific buying opportunity. I don't think there is any doubt that the price of oil will recover. It's just a matter of when. That 'when' will most likely be 12-18 months, but nobody knows for sure. I, for one, will be holding and possibly adding to my position in CPG and will be looking forward to the recovery!


----------



## jargey3000

HumblePie: re Stockhouse - I'm not familiar with the site.... How do you "use" it? Just go there & search CPG, for example? Or is there a section / area on the site you go into? Thanks.


----------



## jargey3000

...or londoncalling: "I love that indicator". Which indicator, please? Thanks


----------



## 0xCC

Canuck said:


> well Baytex just announced a suspension tonight.


It may be a good move in the medium to long term it looks like in the short term the stock is getting punished. Baytex is down 10%-11% this morning while other mid-cap energy names seem to be down aound 1.75%-2% or so.

So if CPG does eliminate the dividend I would expect close to the same treatment. The immediate market response (all things being equal) will be to lower the stock price by probably what the yield was at the time of the dividend suspension. For CPG that could mean a 8%-9% price drop. So if you like CPG not just for the dividend it could make sense to wait for a stock price sale if they do end up suspending the dividend.


----------



## My Own Advisor

100% agree OxCC - will wait until CPG suspends dividends like BTE did. I think this will happen this fall, just guessing of course.


----------



## Canuck

0xCC said:


> It may be a good move in the medium to long term it looks like in the short term the stock is getting punished. Baytex is down 10%-11% this morning while other mid-cap energy names seem to be down aound 1.75%-2% or so.
> 
> So if CPG does eliminate the dividend I would expect close to the same treatment. The immediate market response (all things being equal) will be to lower the stock price by probably what the yield was at the time of the dividend suspension. For CPG that could mean a 8%-9% price drop. So if you like CPG not just for the dividend it could make sense to wait for a stock price sale if they do end up suspending the dividend.


I own CPG , trying to decide if I should sell it for a big loss to offset some equal sized gains, for tax purposes. 

I have 1000 shares and my Cap loss would help offset roughly $4000 in taxes. So the question is, will CPG jump by $4 in 30 days I guess (assuming I will jump back in 30 days from now)
I may just sell and jump into another safer oil company like CNQ or Husky, so if oil does bounce in the 30 day period, I'll still get some gains.

I know these companies aren't in the same category as all these divy cutters, but do any of you think there is any worry of acut from any of these?

IPL
ENF
PPl
ENB
TRP
AlA
GEI
KEY
WCP

I think they are safe, but I may be missing something


----------



## AltaRed

Canuck said:


> I think they are safe, but I may be missing something


Get into their financials and see how much of their cash flow stream is due to the sale of commodities themselves. Take that commodity section of cash flow and zero it out (or even take it negative). What do you get for an answer? 

At least some of those companies made money on the frac spread (buying the BTU's at gas prices, stripping out the NGLs and selling the NGLs at a profit) but that spread is disappearing, or going negative, as NGL prices fall (in concert with oil prices and/or lower diluent demand).

I suspect most, if not all, of those companies are safe but I don't know midstream specifics of all of them well enough to comment.


----------



## blin10

Canuck said:


> IPL
> ENF
> PPl
> ENB
> TRP
> AlA
> GEI
> KEY
> WCP


other than AIA (i don't know much about it) those are very good picks...


----------



## Canuck

blin10 said:


> other than AIA (i don't know much about it) those are very good picks...


woops, that was ALA


----------



## PuckiTwo

Canuck said:


> I know these companies aren't in the same category as all these divy cutters, but do any of you think there is any worry of acut from any of these?
> 
> IPL
> ENF
> PPl
> ENB
> TRP
> AlA
> GEI
> KEY
> WCP
> I think they are safe, but I may be missing something


From the IPL website http://www.interpipeline.com/investor/monthlydividends/drip/drip.cfm _ NOTE: The Premium Dividend™ Component of the Plan was suspended indefinitely, effective with the September 2014 dividend payable on or about October 15, 2014 to shareholders of record on September 22, 2014. *On August 6, 2015, the Dividend Reinvestment Discount, as described in the plan, was reduced from 2% to 0%.*_

"only" the discount on the drip has been eliminated (so far) - BUT is this the beginning of the end?


----------



## doctrine

WCP is an oil producer and definitely at risk of a dividend cut under $40. Sustainable at $45 though, they have some of the best assets around.


----------



## fatcat

doctrine said:


> WCP is an oil producer and definitely at risk of a dividend cut under $40. Sustainable at $45 though, they have some of the best assets around.


maybe not according to this article



> The company’s dividend may be one reason it’s attracting U.S. investors. It’s only one of five producers paying a dividend among the 11 Canadian exploration and production companies worth between $1-billion and $4-billion (U.S.).
> 
> Whitecap’s dividend is sustainable through 2015 and 2016, even if the price of oil stays *low*, thanks in part to hedging on West Texas Intermediate, the North American benchmark crude price, Mr. Fagerheim said.
> 
> Whitecap has 51 per cent of its oil production hedged at $99.15 (Canadian) per barrel for 2015 and 27 per cent hedged at $99.18 for 2016, Mr. Fagerheim said.
> 
> http://www.theglobeandmail.com/glob...ing-assets-in-western-canada/article25932574/


of course it all depends on the meaning of what "low" is :biggrin:


----------



## doctrine

WCP are definitely in a good position, but their projected total payout ratio for 2015 was 94% at $45 WTI with hedges, and oil in the Prairies in particular has collapsed in the last few weeks since their last update. So, likely they are now at or slightly above 100%, and those juicy hedges will be mostly gone in 4 months. It's not a sure thing by any means.


----------



## Canuck

doctrine said:


> WCP are definitely in a good position, but their projected total payout ratio for 2015 was 94% at $45 WTI with hedges, and oil in the Prairies in particular has collapsed in the last few weeks since their last update. So, likely they are now at or slightly above 100%, and those juicy hedges will be mostly gone in 4 months. It's not a sure thing by any means.


I guess nothings a sure bet these days

Thanks for your input you guys, sometimes I miss the obvious.

What a bloodbath this week has been, I ended up not doing any trades today, my NFI and WSP were down almost as much as CPG.


----------



## Westerncanada

Canuck said:


> I guess nothings a sure bet these days
> 
> Thanks for your input you guys, sometimes I miss the obvious.
> 
> What a bloodbath this week has been, I ended up not doing any trades today, my NFI and WSP were down almost as much as CPG.



I have picked up CPG and WCP this week as my top two favorites in the O&G Sector to survive a downturn (Obviously SU and CVE are ahead from a safety standpoint but also feel they have less upside due to their meager decline vs CPG/WCP). 

Again, betting on History here and if Oil is on the longest downturn since 1986 short of a major breakthrough in electric cars rolling out next week the price will eventually correct itself and both of these positions are set to double.


----------



## londoncalling

jargey3000 said:


> ...or londoncalling: "I love that indicator". Which indicator, please? Thanks


Technical analysis uses all kinds of leading indicators to predict the direct of a stock or market. I was refering to the "Stockhouse Indicator" as a contrarian indicator similar to the "belguy under the bed " indicator on CMF a few years back. Stockhouse is another investing forum. Most of it's members live in a land of absolutes permabears and permabulls. Lots of threads blaming analysts, CEOs and boards when a stock performs poorly. Rumour has it the forum is controlled by euphoric posters that build hype around little followed equities and then sell in masses before the price drops. I tend to view Stockhouse as financial pornography for the most part. Like any forum if you plan to use it as a tool for research you have to know who on the board is talking out of which end of their body then follow up with your own DD. There are some intelligent posters there which have helped me make some $ by pointing out some diamonds in the rough that I would not have been aware of otherwise.
Renegade Petroleum is a perfect example of what HP is referring to. Eric Nuttall pumped this one on BNN and then a year later sold for a huge loss. Those that bought the stock only on his advice held on to the stock and demanded class action lawsuits against Nuttall, BNN, The RPL board and anybody who said anything positive about RPL in its entire history. I used some of my gambling $ to play this stock for a profit. Sadly I reallocated that money into Long Run Energy at about $3 which like most oil stocks are down a ways. I have brought my ABC down to about $1.60 but am still bleeding badly. Sorry for the long and slightly off topic post but I did find humour and use in HPs post. Now back to CPG.


----------



## humble_pie

londoncalling said:


> I tend to view Stockhouse as financial pornography for the most part. Like any forum if you plan to use it as a tool for research you have to know who on the board is talking out of which end of their body then follow up with your own DD.



then of course cmf has its own home-grown indicators. Best-known is the gentleman who turns white w fright during 15% corrections & hides underneath his bed. He hasn't fled UTB yet in this cycle, all he's done is cancel his vacation, so i imagine this means that the worst is yet to come.

Pluto has nobly refrained from showing up to crow i-told-you-so but lonewolf alas is already getting a bit stuck-up about his bear call. Me i think it's too soon to call the drift though. He who laughs last will laugh the best.


----------



## GoldStone

humble_pie said:


> Pluto has nobly refrained from showing up to crow i-told-you-so


Pluto doesn't have much to crow about... yet. He joined the forum in Sep 2013. S&P 500 is up 20% since he joined, or 10% a year on average. We need another 20% decline from here just to break even to the point where Pluto-the-bear graced us with his presence. 

(knock on wood)


----------



## JordoR

Down another 15% this morning...


----------



## Pluto

GoldStone said:


> Pluto doesn't have much to crow about... yet. He joined the forum in Sep 2013. S&P 500 is up 20% since he joined, or 10% a year on average. We need another 20% decline from here just to break even to the point where Pluto-the-bear graced us with his presence.
> 
> (knock on wood)


But Pluto still owned some stocks when he showed up, and bought some after he showed up and sold them again for a profit. Also, his portfolio went up in the last week due to puts on an index. As of today his put position is up almost 100% in a week. so no, it doesn't have to go down more to break even. 

Besides, Goldstone, don't you have a stock/bond balanced strategy which would require you to sell rising stocks and switch to bonds to remain balanced? As I recall you criticized me for doing something similar to what you do.


----------



## humble_pie

GoldStone said:


> Pluto ... joined the forum in Sep 2013. S&P 500 is up 20% since he joined, or 10% a year on average



as best i can recall the unknown planet only turned bearish in the latter part of 2014.

he called the december/14 interim low in energy stocks perfectly, let's give credit where credit is due .each:


----------



## gibor365

JordoR said:


> Down another 15% this morning...


But if you would pick it up in the morning and sell now, your profit would be more than 15 %


----------



## AltaRed

gibor said:


> But if you would pick it up in the morning and sell now, your profit would be more than 15 %


That number is meaningless in hindsight. Savy traders might play that game and have a 60-40 chance of being right (and only better than 50-50 here because it is so far down to begin with). Investors don't speculate/gamble. As John Maynard Keynes said: "The market can stay irrational longer than you can stay solvent"


----------



## OptsyEagle

humble_pie said:


> as best i can recall the unknown planet only turned bearish in the latter part of 2014.
> 
> he called the december/14 interim low in energy stocks perfectly, let's give credit where credit is due .each:


My memory kind of remembers the call being the low. Since it is now the interim low, I am not sure how much credit should be afforded.


----------



## OptsyEagle

gibor said:


> But if you would pick it up in the morning and sell now, your profit would be more than 15 %


That is probably what is happening as we speak...hence the afternoon pullback. It will be interesting to see who wins out at the close, but as AltaRed indicated, not all that useful or valuable.


----------



## JordoR

gibor said:


> But if you would pick it up in the morning and sell now, your profit would be more than 15 %


Yeah I had a very low order in that I created last week at 11.50 that I thought would probably never get filled... It was executed this morning (to my surprise) to add to my position and CPG and lower my average.


----------



## CPA Candidate

CPG is now trading at 0.54 of book value with a decade plus of drilling inventory and a significant amount of hedging this year. Even if we speculate the assets are impaired 20%, it's still extremely cheap.

If you have 5-10 year horizon this could be one hell of an entry point. I'm really quite astonished at the level of selling pressure. CPG has dropped far more than the price of oil in Canadian dollars and they are only 50% exposed to the spot price this year and 25% next year. There is a definite disconnect between the value and the stock price given the realized prices they receive are much better than the open market. The market seems to give no weight to the amount of confirmed cashflow that hedging provides.

That being said, it could still go lower and I'm not stepping in yet.


----------



## AltaRed

It think it is the other way around. 50% hedging this year and 25% next year and that is one reason investors have gotten skittish. If oil prices remain soft going into 2016, cash flow will drop dramatically with the 75% of production that is unhedged.

As well, cash flow is not a direct relationship with oil price. At some level, be it $20/barrel, or $30 or $40 of operating costs, cash glow disappears completely. A company's cash flow thus drops proportionately much faster than oil price. No linear relationship. Companies usually provide enough insight and granularity in their quarterly financials that net operating cash flow can be calculated to a reasonable degree. But it takes some effort to do that and it is an approximation since most investors do not know the specifics on a company's tax situation, tax pools and royalty rates.


----------



## GoldStone

Pluto said:


> But Pluto still owned some stocks when he showed up, and bought some after he showed up and sold them again for a profit. Also, his portfolio went up in the last week due to puts on an index. As of today his put position is up almost 100% in a week. so no, it doesn't have to go down more to break even.


Congrats on your profits. May we all live long and prosper.

Peace.


----------



## JordoR

Nice bounce back this morning, glad my 11.50 got filled yesterday. I'm extremely happy with my average cost going forward on CPG. It may take awhile to recover, but none of my investments right now are very short term.


----------



## Pluto

OptsyEagle said:


> My memory kind of remembers the call being the low. Since it is now the interim low, I am not sure how much credit should be afforded.


What I remember is deciding that at a specific point a couple of oil stocks looked worth buying, HSE and CPG and holding for 3-5 years, or until oil got up to its former highs. I don't believe oil companies are buy and hold forever types of business due to the boom and bust natrue of the commodity. To me they are a fairly long term trade. So I wasn't really calling any low in oil price. I was thinking that the bust had matured enough to buy low, and set me up to sell high with in 3- 5 years. HSE is currently right about the point I bought it. CPG has tanked further, but I don't see that as super negative. I will buy more sometime this year. This is all premised on it being a survivor, and recoverer of busts. As always, the premise could be wrong, but I'm still a believer. 

I know lots of people are critical of a "buy low, sell high" strategy, but that's their problem, not mine. I guess the ones who claim they can't know the difference between low and high, so they can't buy low and sell high, dollar cost average some index. There is nothing wrong with that, but I don't see the point if the index includes oil, airlines, and other boom bust cyclicals.


----------



## fatcat

Pluto said:


> What I remember is deciding that at a specific point a couple of oil stocks looked worth buying, HSE and CPG and holding for 3-5 years, or until oil got up to its former highs. I don't believe oil companies are buy and hold forever types of business due to the boom and bust natrue of the commodity. To me they are a fairly long term trade. So I wasn't really calling any low in oil price. I was thinking that the bust had matured enough to buy low, and set me up to sell high with in 3- 5 years. HSE is currently right about the point I bought it. CPG has tanked further, but I don't see that as super negative. I will buy more sometime this year. This is all premised on it being a survivor, and recoverer of busts. As always, the premise could be wrong, but I'm still a believer.
> 
> I know lots of people are critical of a "buy low, sell high" strategy, but that's their problem, not mine. I guess the ones who claim they can't know the difference between low and high, so they can't buy low and sell high, dollar cost average some index. There is nothing wrong with that, but I don't see the point if the index includes oil, airlines, and other boom bust cyclicals.


you called oil at 50, if your memory is faulty, mine isn't on the subject ... which is fine ... you were wrong, no problem, i am wrong all the time

the key is to make a LOT of calls, then you can cherry pick the right call in hindsight


----------



## Pluto

londoncalling said:


> Technical analysis uses all kinds of leading indicators to predict the direct of a stock or market. I was refering to the "Stockhouse Indicator" as a contrarian indicator similar to the "belguy under the bed " .


Hey that's cool. Will you tell us what the stockhouse indicator is showing currently?


----------



## Pluto

fatcat said:


> you called oil at 50, if your memory is faulty, mine isn't on the subject ... which is fine ... you were wrong, no problem, i am wrong all the time
> 
> the key is to make a LOT of calls, then you can cherry pick the right call in hindsight


Please show me where I called oil at 50. If I did, I don't remember. What I remember is thinking it could go to 30, but if it did it wouldn't stay there long. Unless you can show me where I called an absolute bottom at 50, I think you are putting words in my mouth. Besides, I don't make "calls". I evaluate what I think are the odds and go with odds that look in my favor.
I think in terms of provabilities, not absolute calls. 

So when I bought HSE, and CPG my thoughts were I don't know if this is the bottom for oil, but it is close enough to take the risk on decent companies. 

Anyway, the proof is in the pudding: show me the post where I said oil hit bottom at 50.


----------



## fatcat

Pluto said:


> Please show me where I called oil at 50. If I did, I don't remember. What I remember is thinking it could go to 30, but if it did it wouldn't stay there long. Unless you can show me where I called an absolute bottom at 50, I think you are putting words in my mouth. Besides, I don't make "calls". I evaluate what I think are the odds and go with odds that look in my favor.
> I think in terms of provabilities, not absolute calls.
> 
> So when I bought HSE, and CPG my thoughts were I don't know if this is the bottom for oil, but it is close enough to take the risk on decent companies.
> 
> Anyway, the proof is in the pudding: show me the post where I said oil hit bottom at 50.


your posts don't go back far enough ... they only show 6 pages of your posts, calls, thoughts, ideas, reflections, musings whatever ...


----------



## CPA Candidate

Eric Nuttal called CPG the most mispriced oil and gas name in Canada while on BNN yesterday and had it as a top pick, echoing my sentiments.


----------



## Homerhomer

CPA Candidate said:


> *Eric Nuttal* called CPG the most mispriced oil and gas name in Canada while on BNN yesterday and had it as a top pick, echoing my sentiments.


his track record indicates that one should definetely pay attention to what he says, and then do the complete opposite.


----------



## AltaRed

Homerhomer said:


> his track record indicates that one should definetely pay attention to what he says, and then do the complete opposite.


I seem to recall coming to the same conclusion some years ago. IIRC, the Sprott fund he manages has not done well relative to XEG.... but I could be mistaken. 

I think the problem is his specialty generally is toward the small(er) caps and they are notoriously volatile relative to the big energy companies. There can be some big winners but there are way too many big losers in that segment and a fund must be diversified. If one only has to hold about 3-5 names, he probably knows how to pick those, e.g. know who is good at what they do in the oil patch and follow those management teams around as they develop and sell the oil companies they run.


----------



## Pluto

fatcat said:


> your posts don't go back far enough ... they only show 6 pages of your posts, calls, thoughts, ideas, reflections, musings whatever ...


Well I'm pretty sure you misremembered. However if it is important to you I made posts in the HSE thread around the time I bought HSE. It may be in there.


----------



## CPA Candidate

Eric Nuttal's fund has lost 40% over the last year while XEG has lost 50%. Over 5 years the fund has a return of -1.9% while the index is -40%. I think you can attribute this mostly to his lack of investment in oil sands companies.

You are free to ignore his advice, but he strikes me as very knowledgeable with very detailed analysis.


----------



## favelle75

Homerhomer said:


> his track record indicates that one should definetely pay attention to what he says, and then do the complete opposite.


Easy to say when the commodity is down 70+%. LOL. As far as I know, he's beating the index energy and he manages an ENERGY FUND. Remind me again why we'd do the complete opposite?


----------



## JordoR

There have been so many negative days lately, it's nice to see a gain above 10%. Makes me happy about my 11.50 order.


----------



## thepitchedlink

yup, that is nice to see...Im still happy to have got in at 13$


----------



## jargey3000

thanks, Eric Nuttal


----------



## Westerncanada

Eric Nuttal or not.. purchasing quality companies at 10 year lows is always a pretty strong bet. 

I am certain Oil will have a few more nasty dips nefore it stabilizes.. but those people who are getting in at the basement should have some huge upside.


----------



## AltaRed

CPA Candidate said:


> Eric Nuttal's fund has lost 40% over the last year while XEG has lost 50%. Over 5 years the fund has a return of -1.9% while the index is -40%. I think you can attribute this mostly to his lack of investment in oil sands companies.
> 
> You are free to ignore his advice, but he strikes me as very knowledgeable with very detailed analysis.


Good that someone has done the comparison. My impression was definitely off base. I do agree Eric has typically picked companies not in the oil sands.


----------



## Westerncanada

Westerncanada said:


> Im buying... all day at $14.50? Yes please


Had to lock in some profit last night and unloaded my CPG for a healthy 12% return in two weeks. 

That said.. will buy again on the Dip if it does go south after q3 earnings or deeper oil declines


----------



## 1980z28

Trading stopped


----------



## thepitchedlink

It still showed quotes on my Itrade here 10 min ago.....what's going on?


----------



## 0xCC

TDDI is showing a trade at 10:21 (which is the time I am typing this). It is down 4.27% but so are a lot of energy companies.


----------



## 1980z28

Trading was stopped for about 5 minutes or so at about 9:50


----------



## HaroldCrump

HaroldCrump said:


> This could be just another sexed-up rumor like the ISIS selling $6M worth of crude oil to Turkey every day.





humble_pie said:


> totally off-topic now. I've never believed the so-called ISIL fortune gained from selling oil through turkey.
> afaik there were only 2 pipelines, one old one transporting gas from syria through turkey, the other also ancient but recently refurbished to carry oil from kurdistan through turkey to a turkish port.


There is some new data making its way through the news media regarding the "_ISIS selling millions of $ of oil_" theory.

The following two charts have appeared as "proof", one showing the route of the smuggling and another showing the process by which ISIS traders are making money.

I have not dug through to the originating source of yet, but one interesting point is that the claimed amount seems to be falling steadily since the summer.
When the story first broke last fall, ISIS was supposed to be making $6M/day.
By this summer, that number had dropped to $3M/day.
These charts are claiming $1.5M/day.

Funny how the amounts are dropping by exactly 50% of the previous amount.

Next claim will probably be $750K/day


----------



## humble_pie

HaroldCrump said:


> The following two charts have appeared as "proof", one showing the route of the [oil] smuggling and another showing the process by which ISIS traders are making money.
> 
> I have not dug through to the originating source of yet, but one interesting point is that the claimed amount seems to be falling steadily since the summer.




HC i hope you can show the source eventually.

those graphics look super cool but they don't prove anything. Anybody can gussy up a good-looking graphic. If one peeks under the graphic hood, one is left with questions, namely:

1) our ISIL oil trader arrives at al-Omar, an oil well situated smack in the middle of desert nowhere. No refinery for many kilometres, plus surrounded on all sides by unfriendly terrain.

he loads his truck with what? raw crude? there'd have to be convoys of those tanker blighters. Surely satellite radar would pick up such convoys on the roadways. Except that AFAIK radar isn't. Not picking up oil tanker trucks travelling in convoys.

2) so where does our ISIL trader go with his shipment? he has to export the crude out of syria somehow. Either out of mediterranean ports or else north to turkey.

the map shows - accurately - how Assad's forces & miscellaneous rebels are controlling the coastal regions. Now our friend driving his precious cargo in his blighter is forced to head north to turkey.

but wait! how can he get through Rojava, also called West Kurdistan. It's the broad east/west strip shown in green across northern syria, along the turkish border, on the map. In fact, it's the large & prominent size of Rojava that's telling me that this map is recent. Emerging Rojava is a revolution that's happening right this minute.

the only border crossing available to our ISIL driver & his oil tanker truck is that narrow region immediately north of Aleppo. Will he make it? will his pals driving their own blighters loaded with crude also be able to cross north of Aleppo? is there a secret crude oil smuggling ring in turkey that will pay ISIL traders who manage to cross the border $60-100 per barrel, then drive that product north to the turkish sea port of Ceyhan?

i for one am truly doubtful about all this. As i've mentioned, if this were really going on, satellite would have picked up the trucking traffic on the highways.

a related issue is Who is going to Service those ISIL Oil Wells & that Refinery? last i heard ISIL forces did not include experienced graduate petroleum engineers capable of running such operations. Also, where & how is ISIL going to purchase major parts when the inevitable breakdowns & tune-ups occur? they can't manufacture their own parts, who is going to sell to them? are parts being smuggled in from the west? they'd be a little hard to camouflage, i'd say. Will russia sell parts to ISIL? will china sell parts to ISIL?

the reason i'm asking these questions is because i'd like western nations to do much more than they seem to be doing to shut down ISIL financing. The goal should be to starve ISIL out, imho. This should be much easier to do with a brand-new revolutionary "state" than it is with an old, well-established, economically diversified nation such as russia.

the west should be doing everything it possibly can to prevent, block & disrupt ISIL oil exports.


----------



## jargey3000

election day buying opp. today????


----------



## 0xCC

jargey3000 said:


> election day buying opp. today????


Today's price action is not related to the federal election.


----------



## jargey3000

0xCC: oh? can you expand on that?


----------



## 0xCC

jargey3000 said:


> 0xCC: oh? can you expand on that?


Look at what the price of oil did today. The election is a very minor factor for Canadian energy companies compared to the price of oil.


----------



## favelle75

0xCC said:


> Look at what the price of oil did today. The election is a very minor factor for Canadian energy companies compared to the price of oil.


Oil down 2%, CPG down 7%. Hmmm.....


----------



## noobs

I wonder how people will feel tomorrow morning.. I mean it`s only the atlantic region but the liberals are killing it..


----------



## HaroldCrump

^ that's not going to make any difference to the price of oil whatsoever


----------



## noobs

I really hope so because the conservatives were really pushing Alberta/pipelines while the liberals wanna put more restrictions


----------



## HaroldCrump

humble_pie said:


> HC i hope you can show the source eventually.


I found it...fortunately, the source seems to be a reputable news source - the Financial Times of London.
They wrote an article on ISIS oil, which seems to be part of an entire section on ISIS.
*Here is the article*.

Story is quite recent...surprisingly, only about 1 week old.

I haven't read the entire article just yet...at work right now, will read tonight.
Both the pictures above are from that source.

It seems several individuals and groups have picked up on it.
The map and the workflow chart were included in a blog post by the Cato Institute.
Economist Steve Hanke also tweeted it, which has been picked up by several news aggregator sites.

humble_pie, this is now more in your domain than mine...do you think these stories are being "planted", even in reputable news sites like the FT?
I mean, these days it seems trivially easy to "plant" stories, given how easily things go "viral" and assume a life of their own.


----------



## humble_pie

thankx so much for the source!

i will read tonight, too.

i don't know about the Financial Times, but i frequently see slanted stories "planted" in the globe & mail. One would think the venerable globe would be a bastion of journalistic objectivity, but not these days.

the sad state of affairs has to do with the shrinking financial circumstances of traditional media, naturally they turn to out-sourcing content because it's cheaper than maintaining staff journos, sooner or later a few well-written pieces of propaganda make their way in.

re ISIL selling oil, i'm not able to see who this story would benefit. Personally ... just a hunch ... i'm thinking the principal ISIL support would likely be the big donors. Saudi arabia? others?


----------



## humble_pie

HaroldCrump said:


> I found it...fortunately, the source seems to be a reputable news source - the Financial Times of London.
> They wrote an article on ISIS oil, which seems to be part of an entire section on ISIS.
> *Here is the article*.
> 
> Story is quite recent...surprisingly, only about 1 week old



this is an excellent article. What a jewel to find, thankx again.

here's a key point imho. it probably was not only as recently as 2013 that the builders of ISIL saw oil as their highway to pan-arab statehood. Probably long, long before. In one way or another it was saddam hussein's vision, it was khaddafi's vision, surely it must be the vision of all indigenous people in the middle east, no?

from your article:


_*Oil as a strategic weapon*

Isis’ oil strategy has been long in the making. Since the group emerged on the scene in Syria in 2013, long before they reached Mosul in Iraq, the jihadis saw oil as a crutch for their vision for an Islamic state. The group’s shura council identified it as fundamental for the survival of the insurgency and, more importantly, to finance their ambition to create a caliphate._


----------



## humble_pie

HaroldCrump said:


> I found it...fortunately, the source seems to be a reputable news source - the Financial Times of London.
> They wrote an article on ISIS oil, which seems to be part of an entire section on ISIS.
> *Here is the article*.
> 
> Story is quite recent...surprisingly, only about 1 week old.



i read this article. OMG this is wonderful. It's living proof why the free press in the west does a fine, full & fantastic job, for readers who bother to look carefully.

all of a sudden i learned why those convoys of trucks are not being reported. Lightbulb!

harold, scroll down in your article. Do you see the photo of the rebel commander in Aleppo who says the situation is "laughable"? inside that headscarf, she's a female commando, right? what do you think? there are women soldiers all over Rojava, there have been female units in the peshmerga for decades.

freelance journo Ahmad Mihdi, who probably contributed most of the field reportage in this story, tweets under another name. So far, i think he's male ... shall we go to e-mail??


----------



## HaroldCrump

humble_pie said:


> harold, scroll down in your article. Do you see the photo of the rebel commander in Aleppo who says the situation is "laughable"? inside that headscarf, she's a female commando, right? what do you think? there are women soldiers all over Rojava, there have been female units in the peshmerga for decades


That is a woman without a doubt.
Now, we do know that many Western women have been joining ISIS for many months now.
Not just muslim women, but "old stock" Western women as well.

Similar to the oil story, I had initially wondered whether the reports of women joining ISIS were "planted", or just alternative media rhetoric.
However, does not seem to be so.
It is now quite clear this is happening, and not in insignificant numbers.

*Here is a good write up from the Guardian newspaper*.
This issue is particularly a problem in Britain.



> freelance journo Ahmad Mihdi, who probably contributed most of the field reportage in this story, tweets under another name. So far, i think he's male ... shall we go to e-mail??


Did you navigate to all the linked articles on that story?
There is a more detailed, step-by-step analysis of ISIS oil sale process.

*Here is that article*.

I'll email you to discuss Mihdi, etc.


----------



## HaroldCrump

humble_pie said:


> i'm thinking the principal ISIL support would likely be the big donors. Saudi arabia? others?


The Saudi ruling family is not supporting ISIS, at least not by funding them directly.
Much as they would like to see ISIS get rid of al-Assad and wipe out all the Alawites, they are afraid that they might end up creating a Frankenstein.

Having taken Syria, Iraq and wiped out the KRG, ISIS will turn their attention to the KSA.
They are already present in Yemen.

What the KSA wants is for the US to turn the other way until ISIS gets rid of Assad, then turn around and bomb ISIS.
Their desired end state is a Syria without Assad and with a puppet Sunni govt. in power.


----------



## LongShorts

Anyone else riding the CPG train? Choo choooooo


----------



## Chris L

Picked up a back seat a few days ago - up 20%. Chicka, chicka, CHOO! CHOO!


----------



## hboy43

LongShorts said:


> Anyone else riding the CPG train? Choo choooooo


No, too busy being pulled by the train with TCK.B, BTE, ECA etc. locomotives.


----------



## daddybigbucks

lol. more like riding the bubble.
i just want to make sure i get off before we hit poortown.


----------



## LongShorts

daddybigbucks said:


> lol. more like riding the bubble.
> i just want to make sure i get off before we hit poortown.


Ahhhhh don't be a Debbie Downer.....price target consensus north of $24....all those analysts can't be wrong can they? :stupid:


----------



## Nerd Investor

Riding it up, but I also wrote a covered call at $16 before the rally, kind of annoying


----------



## Chris L

You think oil is currently in a bubble....okay. Like it has only partial popped already? Who cares if it's partially deflated or whatever, far less risk now than it was when oil was $100....

But then again, people have this arbitrary $20 in their head and if it doesn't touch $20 these are all 'dead cat bounce.' Oil will always have value and it will be greater than it's cost of extraction. Enjoy the ride, up.


----------



## doctrine

The dividend has been cut by 70%.

http://business.financialpost.com/n...d-posts-382-4-million-net-loss-on-write-downs

No surprise. Based on Q4, minus hedges they were at a 150% all-in payout ratio (Capital expenditure + dividends). 

At the lower ends of capital expenditures, at least now they can live within cash flow at $35 US WTI provided they keep the lid on expenditures. The new yield is 2%.


----------



## My Own Advisor

Smart move, no surprise, and a good call I think. 87% reduction since the oil rout began.


----------



## Chris L

Market shrugs it off because you gotta do it.


----------



## LongShorts

That explains the little dip in the stock first thing this morning.


----------



## CPA Candidate

Nothing surprising here except that there is a dividend at all. All oil companies are in slow motion bankruptcy with many of their "assets" completely uneconomical. These write downs are based on future cashflows being less than the carrying value of the asset, but those cashflows are a total guestimate based on forecast oil prices . If you look at the tables prepared at the end of 2014 for future oil prices, they were a mile off from reality seen today. You can bet that is the case for the 2015 ending price decks - pure fantasy. The assets are likely worth less than they are reported at right now.

The Canadian oil industry is going to be close to complete death if these prices stick around for another year or two. But don't worry, Trudeau is going to fix everything by letting environmentalists derail pipelines and imposing carbon taxes.


----------



## Chris L

Don't get me started on Trudeau. Much as I would like proof that he is a complete failure, I'd rather see Canada be prosperous and part of that includes the oil sands. Trudeau is a joke to the modern economy. Now let's get a Woman on the Canadian currency...as if the Queen doesn't get enough play. *roles eyes*


----------



## LongShorts

Nice 4% jump in CPG this morning....Glad I weathered the storm and hung onto this one through the dividend slash


----------



## Chris L

Up 21% for me....this will continue.


----------



## hollyhunter

*Bullish technical indication*

RESCENT POINT ENERGY CORP. (CPG.TO) Bullish technical indication: MACD goes green, %K line is on top of %D line and RSI is in bull territory, which stands at 64.70. Would like to see a break above 19.44.


----------



## Emjay85

Any opinions on where this may go? I have had my eye on it for a few months but am a little hesitant to jump on it.


----------



## OnlyMyOpinion

I would stay hesitant - permanently.
Aside from some short term up-down fluctations in oil price, do you have some reason to think global supply/demand fundamentals are improving? 
If so, why is CPG 'the one' to put your money into?


----------



## AltaRed

Think about this for a moment just as an example: https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WCRFPUS2&f=W

US oil production started the year at about 9.5 million barrels per day of production. The data for the last two weeks ending June 8 and 15 indicate 10.9 million barrels of oil per day of production.... .an increase of 1.5 million barrels per day in just 6 months!!! The US is now producing the same, or more, than either Russia or Saudi Arabia and both of those can step up their production quite easily too. 

Granted global demand is up by about 1.5 million barrels per day too, but Trump is going to fix that fast with his tariff war. Global oil demand growth is likely to stall as developed economies falter/hesitate. There are no fundamentals to support oil prices over the short term. 2019 may be a different story but I have been saying that now for almost 2 years.

And as OMO said, why CPG? What is its current Debt/Equity ratio relative to a number of its peers? Debt servicing costs impair a company's ability to take advantage of increased margins when oil prices improve.


----------



## TomB19

This company has a colorful history. It's not all bad but I wouldn't invest unless you really understand the industry they are in.


----------



## agent99

Only good thing about CPG for me, is that I can sell it at a loss (on US side) to offset capital gains on other stocks. At same time get some US$ for trips South.

Not much left in account though


----------



## CPA Candidate

The valuation is so insanely detached from reality on this stock and it cannot last. $72 USD WTI and the stock is trading at 0.6x book value. The shares are completely disconnected from the price of oil that they are dependent on. Eventually the correlation to oil must resume.


----------



## GalacticPineapple

CPA Candidate said:


> The valuation is so insanely detached from reality on this stock and it cannot last. $72 USD WTI and the stock is trading at 0.6x book value. The shares are completely disconnected from the price of oil that they are dependent on. Eventually the correlation to oil must resume.


What about the long-term debt? It's been trending up for a decade and is at an all-time high.


----------



## jargey3000

wow.
havent looked at it in a while.
closed @ 5.89 on friday. whats going on?


----------



## Pluto

Just because the price is low, doesn't mean its a bargin. double check what I say as I may have misremembered. Apparently, the history is they issued stock to make purchases. In the purchase price was a lot of goodwill that doesn't amount to a hill of beans when it comes to income from the purchased properties. Too, management made promises they didn't keep. So at least two different problems: diluted stock, and no trust in management. 

Look elsewhere for bargins.


----------



## doctrine

I would go with another company if you want oil exposure. They don't really have the cash flow to meaningfully grow production per share and reduce debt. A drop in oil prices will mean they will probably have to start letting production slip lower.


----------



## dubmac

doctrine said:


> I would go with another company if you want oil exposure.


I've been watching VET. It's around the same price it was back in Jan 2016. yield is high (8%) - but they never seem to cut, and the price seems the stay range bound between 55 to 30.


----------



## doctrine

VET has much more exposure to world oil prices, but they did buy Spartan Energy at a premium which increased their exposure to the landlocked Alberta energy market. They probably could have bought Spartan for 30-40% less now.


----------



## jargey3000

anybody buying CPG - at these sub $5 levels- as a l o n g t e r m hold....?


----------



## james4beach

This is a horrible looking chart and that's some really fierce, high volume selling recently. I don't like the look of this stock... I would avoid. There are far better energy companies you can invest in.

I would never buy a chart that looks like this: http://schrts.co/e3cSRB

The market's opinion is that this company does not have a future.


----------



## AltaRed

Add to that the modus operandi of this company was to continually abuse its shareholders, continually sucking them in for more equity year after year, until the music stopped. CPG's management team doesn't deserve another chance. Same is true for ALA and a number of other companies.


----------



## Dilbert

I finally ditched all my holdings a few weeks ago. I think they might be an acquisition target, but I have no real evidence of that, only a feeling.

No more oil and gas producers for me. I’ve learned my lesson with CPG, SU and a few others I got screwed on over the years.


----------



## doctrine

If you want in the oil space, you have plenty of options. CPG will struggle to maintain production at cash flow at current prices. There are other companies who can probably still grow 5-10% at this level, with less debt. And those companies are getting nailed too.


----------



## robfordlives

AltaRed said:


> Add to that the modus operandi of this company was to continually abuse its shareholders, continually sucking them in for more equity year after year, until the music stopped. CPG's management team doesn't deserve another chance. Same is true for ALA and a number of other companies.


Yup, sold around $14...actually I initiated a position around that price rode it all the way up to its peak and then sold at around my original purchase price, what a ride lol. They claimed to have done a rigorous internal review and Saxburg was kicked up to the Board while one of his henchmen was promoted to CEO. Ever since then the bloodbath has accelerated as the hope was new fresh management was brought in. CPG is still known for its free breakfasts and palatial regional offices.


----------



## OnlyMyOpinion

Dilbert said:


> ... No more oil and gas producers for me. I’ve learned my lesson with CPG, SU and a few others I got screwed on over the years.


It's a bloody sector these days to be sure. I read an interesting op-ed today noting that the winding down of O&G is exactly what the federal liberals want - Trudeau has said as much. The provincial NDP as well. It's just that it is winding down a lot faster than they had expected.:apologetic:

I wouldn't place SU in the same bucket as CPG although I'm sure a person could have lost money on it as well.


----------



## jargey3000

...I think my question's been answered....


----------



## maxandrelax

I have been holding bags of this and Pengrowth for a long time now. I think I may have bought both of them at all time highs when I needed oil and gas in my diversified portfolio. Looking at about 20 gs of loss if I sell. Wondering if it is time to say good bye. 

I’m not going to buy any more oil and gas in the future. 

What have the long time holders done that have watched this horror show develop? What would you do?


----------



## dubmac

maxandrelax said:


> What would you do?


Dump it.

Take the tax loss. I lost $ on BTE years ago, (in at 40, out at 6). 
I sold across 2 years to spread out the tax loss. Sold a lil in Dec, and again in July the following tear.
I sold my SU when the price surged in the Spring. Probably won't touch OG again for a while - maybe never - not my cuppa tea.
ETF's are I think a better way to manage O&G - XEG and others. But I don't have any of it.
In the bigger game, yes it was a loss, but I have some winners that dull the sting.
No bruised ego. I learned quite a bit.


----------



## maxandrelax

Why did you sell it across two years. Can’t you carry the loss for as long as you want? Why not sell it at once? Thanks


----------



## AltaRed

maxandrelax said:


> Why did you sell it across two years. Can’t you carry the loss for as long as you want? Why not sell it at once? Thanks


I don't understand that either, BUT it may be related to maybe Dubmac being hopeful of a slight boost in market price in year 2, i.e. minimize seller's regret? I wouldn't prolong the agony personally. Shed the POS and move on!


----------



## maxandrelax

AltaRed said:


> Shed the POS and move on!


Done. I feel like that red bull wings guy now!


----------



## humble_pie

maxandrelax said:


> Done. I feel like that red bull wings guy now!



seriously, you just up & sold all your CPG for a $20k capital loss?

i hope you have a $20k gain to offset the loss. At least stay tax neutral. You have a few more days to crystallize such a gain.

crescent point bulls - i'm not one, but there are still some - could make a case for buying CPG at this point in time. Price is all-time record low. 

the company is not a dilbit shipper, what it sells is a high grade of bakken sweet crude. Some are calling for CPG to move head office to the US & become an american gas producer.


----------



## AltaRed

Why? Cap losses can be carried forward indefinitely and/or carried back 3 years. I've never looked to offset a cap loss with a cap gain in the same tax year.


----------



## humble_pie

^^ IIRC there are subtle little things that go better on a tax return when the cap loss is used to offset a cap gain the same year

the line entry for claiming a prior cap loss appears later on in the calculations, whereas an unreduced capital gain has to be entered early, on line 127. There are certain later calculations that throw back to line 127 so it's optimal if this amount can be kept as low as possible.

i have nothing against tax loss carry forwards but they don't deliver quite the same dollar return, at least not for quebec returns

right now is the worst of times for crescent point. If one does not definitely need the tax loss for this year, me i'd tend to hold off on the selling.


----------



## AltaRed

Agreed cap losses of other years are taken between Net Income and Taxable Income, but I see no difference in how it applies to a tax calculation. All tax calculations are based on Taxable Income while benefit claw backs are generally based on Net Income. It is almost always better to apply one's capital losses where it best suits one's marginal tax rate. That said, better to have the discussion in a Tax thread.


----------



## humble_pie

AltaRed said:


> Agreed cap losses of other years are taken between Net Income and Taxable Income, but I see no difference in how it applies to a tax calculation. All tax calculations are based on Taxable Income while benefit claw backs are generally based on Net Income. It is almost always better to apply one's capital losses where it best suits one's marginal tax rate. That said, better to have the discussion in a Tax thread.



yes could go in tax section but i am too vague for that, usually purging myself of the dreadful documents every year as soon as filed.

perhaps the diff is quebec tax returns only. Que health services tax & pharmceutical tax both reference back to the line item which equates to federal line 127, ie total income calc. If one doesn't apply any tax loss untl later, this line will include any capital gain one has crystallized that year. This in turn will elevate the quebec hlth & pharma contributions calcs


----------



## maxandrelax

Thanks for the tax thoughts. Sell now sell later... doesn’t help much when the albatross is 46 bucks a share and 12 for pgf. On to other things. Will mostly wash out with weed stock gains and enercares surprise sale.


----------



## dubmac

maxandrelax said:


> Why did you sell it across two years. Can’t you carry the loss for as long as you want? Why not sell it at once? Thanks


I hoped it would go back up! but it didn't, so I told the rest of it.


----------



## Pluto

I bought this loser back in 2014 as it looked like a bargin that would scoot up when oil recovered. Well oil went over 70 and this millstone around my neck kept declining, so I dumped it earlier this year. Just get rid of it, and don't look back.


----------



## twa2w

Looks like this may be getting into buy territory now.
As I think John Templeton said, buy at the point of maximum pessimism.

Buy when everyone is selling. Sell when everyone is buying. 

;-)


----------



## james4beach

I wouldn't think of buying this unless their financial statements show encouraging results and a pattern of turning around. Horrible stocks have a tendency to look "cheap".



twa2w said:


> As I think John Templeton said, buy at the point of maximum pessimism.


That only works for things that can't go to zero (like indexes) or for investments you've analyzed and have a firm basis to be confident on.


----------



## doctrine

CPG is cheap, but the long term outlook is not good. It could bounce, but the business is suffering. They have struggled to increase production per share out of cash flow, and that has been with much higher oil prices. The best thing this company probably could do, given where they are, is stop investing in drilling and just cash flow out the business and just buy the shares out. Could probably realize as much as $8-9 a share in a few years. Unfortunately, that would put most of the management out of a job because it would only take a fraction of the corporate structure to wind down the company. More than likely, it will continue to struggle along.


----------



## twa2w

james4beach said:


> I wouldn't think of buying this unless their financial statements show encouraging results and a pattern of turning around. Horrible stocks have a tendency to look "cheap".
> 
> 
> 
> That only works for things that can't go to zero (like indexes) or for investments you've analyzed and have a firm basis to be confident on.


Almost every deep value stock looks like crap on paper. But don't worry, I usually look for a little momentum first. Things could get worse yet.


----------



## Killer Z

I struggled with the decision to sell this one or hang on for a rebound. Everyone knows that one should not sell at a low, however this principle does not apply when a stock/business is broken. I believe that CPG is broken, and will not recover in the near term. 

I sold my shares and rolled them into VUN. I generally find it easier to sell, if I immediately roll the proceeds into another position and watch them compete. Reminds me that it’s not about whether a stock will rebound, but rather whether it remains the best place to host your investment.

To date, CPG and BTE are my two biggest losses.


----------



## doctrine

CPG cut the dividend by another 75%. Not really a surprise. I believe this is the 3rd cut, and this one is on the heels of much stronger oil prices in Western Canada. CPG was also a full beneficiary of the Alberta cuts as they are unaffected being in Saskatchewan and also downstream of the bottlenecks giving them better prices.

http://www.stockhouse.com/news/pres...-announces-2019-budget-and-quarterly-dividend


----------



## OnlyMyOpinion

doctrine said:


> CPG cut the dividend by another 75%...


From 12 cents per quarter (.03x4) to 1 cent per quarter as I read it. So really the smallest possible 'token' dividend.
Can they change their trading symbol to "POS"?

Arghh, I'm an owner - VBAL holds 0.03% or $0.007/unit of POS - oops CPG.


----------



## AltaRed

The best way to bring the company back to health is to demolish the dividend and buy back stock, currently priced at London sewer levels way below book. It is a no brainer. Just maybe they will now start acting like a real corporation rather than their old income trust habits. I think they will be better for it.


----------



## l1quidfinance

So happy to have sold this dog. I would be sitting on a 90% loss now. 

Happy to have got burnt at a mere 40 % loss. Part of that purely my fault as I invested no speculated and gambled as I purchased 100 shares to write my first covered call. Ahh That covered call premium didnt look so smart when I could finally ditch the dog. I do keep looking back at this but even at these price levels I struggle to see the positive. 

Why oh why do they even bother to still pay any dividend? Surely there isn't a single investor out there who would by this as an income play.


----------



## SkyNaijaMusic

CPG 
<a href="https://www.skynaijamusic.com.ng/2019/01/21/new-music-king-sammy-x-biggy-call-me-biggy/">click link for more information</a>


----------



## humble_pie

AltaRed said:


> The best way to bring the company back to health is to demolish the dividend and buy back stock, currently priced at London sewer levels way below book. It is a no brainer. Just maybe they will now start acting like a real corporation rather than their old income trust habits. I think they will be better for it.



altaRed is right maybe now they could finally nurse this near-corpse back to some semblance of life

but i wonder if there isn't some kind of voodoo karma circling above that pointy little crescent head. Some whisper along the lines of Abandon hope Ye who seek to enter here.


PS totally off-topic since CPG produces commercial grade oil & gas, not bitumen, while its price has gotten killed as if it were the most problematic of the tar sands producers ...

but has altaRed already posted something about the recently-announced alberta upgrader news? alberta will donate the first $400 million? i might be the most ignorant crumb in the land but i was pretty excited at this news. By way of renewing employment in alberta the news is already excellent. But when it comes to building the capability to turn bitumen into synthetic crude on a significant scale, right there in alberta, this news could re-draw the map of canada so to speak. Makes an average canadian downright giddy.

would love to hear expert commentary from altaRed


----------



## OptsyEagle

Have you ever noticed that in a heck of a lot of these announcements, it seems Alberta is always offering a heck of a lot of money to get the thing going. I am not saying it is good or bad for Alberta. I have no idea. It just seems to me that if it takes a lot of Government money to get these things going, how good of an idea are they in the 1st place.

The other announcements I have seen surround things like the chemical processing upgrades at IPL and I think PPL. Can't wait until someone like Trump puts a tariff on the finished products siting government subsidies.


----------



## robfordlives

With respect to that $400Million loan from AB gov't I am very dubious that group will be successful. This is the old Heartland Upgrader reborn and they went bankrupt back in 2008 during the first attempt stiffing many contractors in Alberta. I am very sceptical Mr Yeung can raise the required funds to get this project going again.


----------



## doctrine

CPG just wrote down their assets by $2.7 billion in their latest report. The market capitalization of the company is only $2.2 billion. Wow. Now, that was written in to the stock price, which is why it was notionally trading at < 25% of book, now closer to 50-60% of book.

Such a tough time for oil producers. There are all suffering. Price takers, not price makers, unfortunately.

https://business.financialpost.com/...int-takes-2-billion-writedown-amid-oil-swings


----------



## CPA Candidate

doctrine said:


> CPG just wrote down their assets by $2.7 billion in their latest report. The market capitalization of the company is only $2.2 billion. Wow. Now, that was written in to the stock price, which is why it was notionally trading at < 25% of book, now closer to 50-60% of book.
> 
> Such a tough time for oil producers. There are all suffering. Price takers, not price makers, unfortunately.
> 
> https://business.financialpost.com/...int-takes-2-billion-writedown-amid-oil-swings


A significant reduction in forward prices and a increase in the discount rate really walloped them.

The sort of strange aspect of this is that lower prices for the shares causes an impairment test and adjustment of the discount rate (higher) which leads to a write down of assets. Then the impairment leads to lower share prices, which increases the discount rate. It can spiral a company right out of business.

Edit: One thing I forgot to mention, as a result of hedges CPG largely missed out on the oil rally of 2018. As their FS show, average benchmark pricing increased in 2018 but netbacks were even with 2017.


----------



## OptsyEagle

I have mentioned quite a few times, perhaps even on this thread, that if you want to outperform the TSX, just NEVER buy commodity based companies, especially miners and drillers.

The problem with all commodity companies, is that economics 101 says that the price of their product will almost always equilibrate to a price between the operational costs of all the producers. In other words, the higher cost producers will almost always lose money. Even if you find the lower cost producers, you have to remember all the others are working very hard at lowering their own costs and therefore how long will their lower costs last. The reason I put emphasis on the miners and drillers, is that with these guys they will not only continue to produce at a loss but as long as their cash flow is higher then their daily costs, they will continue to lose your shareholder money for a very long time and the lower cost producers will still hang around killing the profitability of the industry. In other words, they would like to get back the cost of finding/buying the reserves they are mining/drilling, but it is not paramount to managment's and the employees survival, but it is to yours. They know that they can simply issue more stock, at dilutive prices, or borrow more money on your behalf to replace those reserves. Every now and then they simply write off these losses and the stock market gives it maybe 5 minutes of thought and then the game continues.

There will be exceptions, of course, and there will always be temporary changes to supply and demand that will muddy the observation of this fact, but if you only follow this one rule, you will do much better as an investor, over time. 

Do not let the management of these doomed businesses use your money for their survival and benefit. Doomed in this case relates more to being a looser in business as opposed to bankruptcy. Bankruptcy only comes when investors finally figure some of this out and cut them off. Unfortuneately, their education seems to be limited to individual companies as opposed to the industries themselves.

Just my opinion, of course.


----------



## jargey3000

NOW you tell me!!!!.....


----------



## OptsyEagle

Sorry jargey, but I did not learn it myself by someone explaining it to me. It was a lesson I paid for like all the others. The question is how much do you want to pay, over your lifetime, for this lesson. The lesson's price is variable and totally dependant on how quickly you learn it.


----------



## AltaRed

I spent a good part of my career in an O&G producer. Too many investors get caught up in growth companies because everyone talks about cash flow generation and how that is the only thing that matters. They forget about netbacks and consequently margins, and just as importantly efficiency of capital, i.e. amortization of sunk capital (expressed as UOP or Unit of Production) to calculate earnings. Those who get caught up in growth companies have to know when to get off the train, because that damn UOP is going to catch up, prices might fall and reserves on the books may become uneconomic. There will be a lot of write offs this Spring when 3rd party reserves evaluation firms tell their clients X% of their reserves cannot be developed and produced due to lack of economics as of Dec 31, 2018. It would have been much worse had Notley not imposed curtailments thereby decreasing the discount materially.

The key is to own companies who prudently are in the top 10% of cost of production, i.e. lowest cost/BOE, and who also have low amortization on a BOE basis. For decades (I think), Exxon was the best of the best at this. They only developed reserves that could be done so very cost effectively and it showed with their AAA credit rating. They were the company to be measured against. No idea whether that has changed since it's been more than 15 years since I have looked at any of that industry data, nor do I know how the acquisition of Mobil changed things, if any.

At one time, I owned shares in CRNL because they were ruthless and disciplined in their developments but I exited in, I think 2014 or 2015, when I saw issues developing. I had thought about Imperial as another one given the discipline they also had at one time (the Exxon effect) but never did bite. I never really considered any of the market darlings. I would listen to Eric Nuttall sometimes on BNN when he'd rattle off a bunch of stats for various O&G companies. He understood the importance of low cost production and thus netbacks but I think likely missed the importance of high quality reserves....since his track record on picks was not stellar. Quality of reserves is by far the single largest factor in the economic viability of a company. Discipline in investment is second.

It is no different in mining, be it base or precious metals, or anything else. Gotta be in that best 10% or so, or it is time to go elsewhere. Few commodity companies ever make a long term return (ROCE/ROE) for their shareholders.


----------



## OptsyEagle

By far, the best companies are the ones who don't need to spend much money to earn money. Financial services is one. Although they need enormous amounts of capital, it all sits in their vaults, safe and sound. If a mutual fund company comes up with a new idea for a fund, they can accumulate billons of dollars of capital, generating 10s of millions of dollars in fees, and all they need to do to do that is buy a couple computers, rent another office and pay some highly educated guy/girl a paltry $1 million per year. That may sound like a lot but it sure beats paying 1000 miners $100,000 a year to generate a lot less revenue.

The only other issue in my rule, you will find is "what exactly is a commodity company"?. Miners and drillers are obvious. But others, like an auto manufacturer, has both commodity qualities and some unique qualities. One could argue a bank is a commodity company if they wanted to. Because of all this, I pretty much have changed it to "never buy miners and drillers" and it has served me well enough. There will be a year or two that it will underperform but that tends to get overwhelmed by the decades of better performance that discipline provides.

Lastly, my rule says "never buy miners and drillers". It does not say sell miners and drillers, so if you currently own CPG or some other driller or miner, I might even argue that this might not be the best time to unload it, but I would not suggest buying anymore now, or when you eventually dispose of it. If you want to play the game of buying when out of favour and selling when in favour, be my guest. All I can say, is good luck with that. Some are better at it then others, and anyone would probably be better at it then me.


----------



## londoncalling

OptsyEagle said:


> I have mentioned quite a few times, perhaps even on this thread, that if you want to outperform the TSX, just NEVER buy commodity based companies, especially miners and drillers.
> 
> The problem with all commodity companies, is that economics 101 says that the price of their product will almost always equilibrate to a price between the operational costs of all the producers. In other words, the higher cost producers will almost always lose money. Even if you find the lower cost producers, you have to remember all the others are working very hard at lowering their own costs and therefore how long will their lower costs last. The reason I put emphasis on the miners and drillers, is that with these guys they will not only continue to produce at a loss but as long as their cash flow is higher then their daily costs, they will continue to lose your shareholder money for a very long time and the lower cost producers will still hang around killing the profitability of the industry. In other words, they would like to get back the cost of finding/buying the reserves they are mining/drilling, but it is not paramount to managment's and the employees survival, but it is to yours. They know that they can simply issue more stock, at dilutive prices, or borrow more money on your behalf to replace those reserves. Every now and then they simply write off these losses and the stock market gives it maybe 5 minutes of thought and then the game continues.
> 
> There will be exceptions, of course, and there will always be temporary changes to supply and demand that will muddy the observation of this fact, but if you only follow this one rule, you will do much better as an investor, over time.
> 
> Do not let the management of these doomed businesses use your money for their survival and benefit. Doomed in this case relates more to being a looser in business as opposed to bankruptcy. Bankruptcy only comes when investors finally figure some of this out and cut them off. Unfortuneately, their education seems to be limited to individual companies as opposed to the industries themselves.
> 
> Just my opinion, of course.


Excellent post! I did get sucked into the energy sector once upon a time. I now prefer to invest in the toll roads to energy (pipelines). Although not without risk they provide a better business model.

Cheers


----------



## Argonaut

I agree with the consensus here in totally avoiding commodity companies with the exception of pipelines. In addition to what's been mentioned, by their very definition these resource companies will continually deplete their own source of revenue.

Avoiding these resource stocks is the easiest way to beat the TSX and reduce your portfolio volatility.


----------



## OptsyEagle

Argonaut said:


> I agree with the consensus here in totally avoiding commodity companies with the exception of pipelines. In addition to what's been mentioned, by their very definition these resource companies will continually deplete their own source of revenue.
> 
> Avoiding these resource stocks is the easiest way to beat the TSX and reduce your portfolio volatility.


I agree about the pipelines but have you noticed what a couple of them are doing lately. Namely IPL and PPL. The pipelines are wonderful. The soon to be born chemical companies fly directly in the face of my rule and since I own both in various accounts between myself and my wife, changes will need to be made. In my opinion, the Managements of both of those great companies will regret these decisions, almost as much as their shareholders will. IPLs are kind of regretting it right now and I suspect PPL will certainly have their day when some more time goes by and investors see some of the results of this change.

I can't say what they were thinking when they made these decisions. I don't know how much Alberta money the Premier through at them to make these blunders but I know I won't be hanging around to find out.

Again, maybe I will be wrong but I just hate commodity companies. Maybe they will be the low cost producer, but keep in mind, no reasonably educated person would ever decide to build a commodity business where they believed they would be the high cost producer. Even the high cost producers today THOUGHT they would be the low cost producer. Also, if they are the low cost producers, who were the low cost producers they displaced...and more importantly who will come along tomorrow and displace them.

This is what I am talking about. No one is going to displace their pipelines but I can assure you, one day, if not on the first day, someone will displace them. It is the circle of life, in the commodity business. Just something to think about.

I apologize for hijacking the CPG thread with all this stuff.


----------



## londoncalling

Crescent Point Acquires Kaybob Duvernay Assets and Increases Base Dividend by 25% (tmx.com) 

all the free cash that oil cos have has been used to pay down debt, buyback shares, and distribute cash through special divvies and increases. As of late some acquisitions are starting to take place. I don' have a real stake in CPG and haven't looked at the details of the announcement but they best have learned from their mistakes in growth by acquisition at any cost.


----------

