Enerplus Corp (ERF.TO)

In this mid-cap energy space, it really seemed that at some point yesterday we had a bounce off, and he is really hopeful that yesterday was the bad day. These companies should probably not be paying a dividend right now, so it is within the realm of expectation that if oil slipped again, all these companies would cut their dividends to zero.

A well managed company. They are in one of the sweet spots. He likes it. The valuation goes with the rest of the market. The balance sheet is in good shape. He likes it.

One of the issues is not having control over the Marcellus. They are managing through it well. There are a lot of good things going on, but she is reluctant to step in. Hold it if you own it or move into something with better quality assets.

Has gone through a transition. Came down from 75% oil conventional production. At $60 oil some companies can increase their growth so they have increased their Cap-X budget. You can hang on to this. The debt level is a little high. He prefers the natural gas side of the energy space.

A lot of these things are leveraged to the outlook on oil. Any energy services stock is related to the commodity price. A lot of these stocks will perform poorly over the next two years. He can’t speak to this one specifically, but the overall space is going to go sideways and we will make a big base. You want to buy on weakness and sell on strength. It will go up and down within its range.

His model price is $3.06, a negative 76%. It is paying out $0.60. For this year, the mean estimate is that they are going to lose $0.55 and $0.08 for 2016 at current earnings estimates. He feels energy is going to go lower.

There are lots of stocks in the energy patch that gives you exposure to the same type of business. This one gives you exposure to Bakken oil, some Marcellus gas and some deep basin. A great company. There are other great companies where you can switch around and grab that tax asset of capital loss to lower your capital gains down the road.

Went through tremendous change. They are now concentrated in high valued Nat. gas. They found the sweet spot in the Balkan. They are valued at a very modest level.

His company has this is a sector perform and a high risk, with an $18 target a year out. Have reduced the rating because of their exposure to the US backing the Marcellus asset. He thinks the big hit is going to be coming on their shale play. Questions the sustainability of the dividend.

He sold earlier this year because of geography and where they were. Probably not the first one he would go to.

Third Quarter was a joy. Management changes and operational changes made a huge difference. He is impressed with how good a job they did of reconfiguring their assets. Should outperform its peers.

(A Top Pick Nov 15/13. Down 9.25%.) When he thought this was getting a little ahead of itself at $25, he sold half his position. When it got to $20, and he saw the wheels potentially coming off, he sold more. He still has a little bit left. Very good relative to their peers and are very sustainable.

(A Top Pick Oct 2/13. Up 6.62%.) Pays a good yield. Got to $26 and he did do some selling. He would be much closer to buying this as it has a good sustainable dividend. If you own this one Hold.

(A Past Pick Oct 2/13. up 24.7%.) Just suspended the stock dividend program today. It was a sweetener. Management has said this is going to help build shareholder value longer term, which he agrees with. It is going to alienate some shareholders. Sold half his position when the stock was around $26 and has now just sold the rest on the news. Expects more downside, but will probably go back in.

Likes it, but would not add to it at current levels. Well run and has a good game plan. BNP-T and BXE-T and COS-T are preferred.