Baytex Energy Corp (BTE.TO)

As long as you believe that energy prices have to trade at some level above marginal cost globally, this company is a good purchase here. Well funded. Trading at 3 times normalized earnings. Everybody hates it. International investors are not coming to Canada as long as they don't see we can work as a country and sell our product and find more of it.

It is up 4% today. It is putting a base in here. He does not favour this sector. It is not showing enough strength. If it went above $3 he would take another look.

Predominantly a light oil producer. They have changed their portfolio to only 21% heavy oil exposure – holding 40% in Eagleford light barrels. Debt to cash flow is only 1.7 times. He wants 10% of his portfolio to be this holding.

The company has changed dramatically with the merger with Raging River adding exposure to Eagle Ford and light oil in Canada. In three years, Line 3 and Keystone will be sorted out, even Trans Mountain, makes him like being paid to wait for better times. He still owns their corporate bonds.

Energy stocks are so beaten up that other companies will do M&A; companies see value out there. Generating cash now. Eventually this sector will see a lift. Tremendous upside. There's little risk in this. (no dividend, Price target $6.32)

This company has been through some tough times that will probably persist in terms in differentials in oil pricing. They are a bargain basement valuation, although he would not step into this sector. A lot of good things have to happen in order to realize their analysts' target price. They are more diversified; but there is still a lot of leverage. Cash flows from Eagleford are from Aurora. The valuation is still very levered to the price of oil and their ability to execute in the Duvernay. Try going for lower risk names,