Enerplus Corp (ERF.TO) Buy, Sell or Hold

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Enerplus Corp (ERF.TO)

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26.78

-0.93 (3.36%)

as of Jun 3, 2024, 8:00:00 pm Market Open.

235 watching

BUY

Has had a move up since June. There is some resistance that is going to come into effect at around $19. If we can get this above $18, it will probably entice a little bit of money into it. Right now it’s probably a reasonable Buy as a short-term investment idea. Would buy this and if he gets to $18 would add to your holdings.

TOP PICK

They took some tough medicine and cut their dividend in half. This is a value play with 50% gas exposure and 50% oil exposure. Could be a turnaround position. In 6 months this name will do very well.

DON'T BUY

Cut their distribution and may have to cut again. Payout ratio is still elevated at about 160 effective payout ratio. Probably better names in this group. If you want natural gas exposure, look at Arc Resources (ARX-T) that is flush with cash and hedged for 2012-2013. If you want more oil exposure, go for Crescent Point (CPG-T). If you want Brent exposure because it is widening over West Texas you would go for Vermilion Energy (VET-T). If you want heavy oil exposure, which is narrowing a lot to the differentials, he would choose Baytex Energy (BTE-T).

HOLD

Dividend is safe. Cut within the last couple of months. Market was indicating the cut was necessary but stock has rallied back. You missed it to potentially capture the upside. They are improving the balance sheet. They are moving things in the right direction.

BUY

Nice little breakout – looks pretty good.

DON'T BUY

Sees it going lower.

COMMENT

Cut their dividend when gas prices fell to $1.90. We need a gas price in the Canadian western basin above $4 and maybe even $5 for a lot of these companies to do really well. There won’t be another dividend cut before the end of the year and the balance sheet is fine and everything looks good. Still likes for the longer term. Not drilling for gas now but for oil and liquids which will boost up their balance sheet.

DON'T BUY

Recently cut their distribution in half. Taken their payout ratio down from 270% to 126%. Only about 21% of their portfolio (mostly natural gas) is hedged for 2012. Compared to their peers, who are more hedged, they are in a much tougher place to be. There is still too much natural gas and this probably won’t change until 2015 when LNG starts getting exported.

DON'T BUY

Have some very long-term assets that are not producing anything to the asset value right now. Cut the dividend but are still continuing to pay out a dividend that is well in excess of what they are bringing in.

DON'T BUY

140% payout ratio. 50% natural gas. Gas in storage is 40% above it’s 5 year average. Management will have to cut the dividend. May be a great play next winter if Nat. Gas prices go up.

SELL

This security has been underperforming the energy space since 2007. It has consistently been working its way lower. Not a leader in the group. This sector has a problem. If your concern is capital preservation, there are better places for you to be.

DON'T BUY

This company, along with all of the ex oil and gas trusts have just been hammered with the continually falling natural gas price. In today's questionable gas environment, it is going to continue to be very tough.

HOLD

The long-term picture shows the stock has broken an uptrend line. This was followed by a long downtrend line so there is no surprise the stock has been breaking down further and further. At the current stage, he feels the stock is fairly oversold and there is a chance there could be some recovery rally. If you own, but a stop/loss on it. If it got to $20, then Sell.

SELL

Reminds him of Nortel given that people are hanging on in spite of the chart showing it could be a disaster. It was trying to stay above the $22 level, but once it broke down, the volume picked up and there was obviously some bad news. Technically there is no bottom on this as it keeps breaking down. This one is top ranked as a Short.

SELL

Looks really oversold, but it could keep being oversold. The chart shows no support. $22 was the last level of support. He sold his holdings. Yield of 11.6%, which probably tells you something else is going on. If you own, consider switching to Suncor (SU-T) or Husky (HSE-T).

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