Surge Energy Inc (SGY.TO)

It is on his action alert list. His target is $3.70 this year and $8.50 over the next 3-5 years. The balance sheet is decent, $246 million debt versus $776 million equity. The company is doing 15,700 boe/day, they are 80%-plus light oil. They have a 60 cent cash flow. He thinks the stock could back off into the low $2’s. The stock offers a 4% yield. Below $2 it is a table-pounding buy.

(A Top Pick June 12, 2017. Down 9.98%). This has a great balance sheet and a high dividend. The debt is $246 million against $776 million equity. Book value is $3.33 compared to the price on the day of the interview of $1.95. The company traded at 1.7x book value in 2014 so it could be a $5 or $6 stock. His target for Surge for 2018 is $3.70 with a yield of about 5%. In this market, a good price for this company is $1.90 and a price of $1.80 would be excellent.

Good management and their 5 year plant tries to balance sustainable dividend and capital investment. It is not a well owned stock, almost 80% retail. Through the down turn management have been able to demonstrate the sustainability of the business model. Healthy growth and efficiently bringing debt down. He looks for moderate capital appreciation.

He likes it. They have grown the company organically and by small acquisitions. The balance sheet is in good sheet. The dividend is safe.

They have more oil than gas and they have a dividend, although perhaps not 100% reliable. She thinks they will try their best not to touch the dividend. It has not made her buy list yet.

(A Top Pick Jun 12/17, Down 1%) Mid-December he pulled the trigger on this one as well as other gas stocks.

There is lack of interest in the Canadian mid-cap space right now. His hope is that it changes some time, but he still prefers to have exposure in the US. This is not a name he would own.

Chart shows a nice, long base, although there are some pretty big price moves in it. You don’t want to see it go below $1.50. If it got above $3, it could move pretty substantially. Indicators are kind of low, not telling us a heck of a lot, meaning this is probably not going to want to move until it breaks out of $2.30. And again at $3 you are going to get a big move out of it.

It is mostly an oily company. They just announced an acquisition, increasing production. He likes this one. If you saw it under $2 you are looking at a decent dividend about 4%. He likes management. The balance sheet is in good shape. It is a value name growing at a nice steady pace.

(Top Pick Sep 6/16, Down 12%) They have three major core areas and 12k BOEs. It has a 4.5% monthly yield. It would be a great buy for the yield. Management is focused on shareholder value.

There are other names he would want to own ahead of this. If looking for yield, he would be comfortable buying Torc (TOG-T). If looking for production growth in Canada, he would favour Spartan (SPE-T).

They’ve been showing good discipline and right sizing their portfolio. Reduced debt from $450 million in mid-2014 to about $200 million. Has a much better balance sheet. Probably has a 15% rate of growth in an environment where oil is $50-$55. Dividend yield of 4.5%. (Analysts’ price target of $3.)

This is a company he really likes. They did 13,800 BOE’s a day in Q1. The balance sheet is in very good shape. BV is $3.48. Very cheap on all the value metrics. If we see the price of oil go down, this could come down below $2. It has a very nice dividend. A table pounding buy under $1.80. He has a 12-month target for the end of 2018 of $3.70.

(Market Call Minute.) They are doing a lot of the right things, but unfortunately their debt to cash flow is just way too high.

(A Top Pick Sept 6/16. Down 7%.) For investors going forward, this is a stock that is going to work out very well. 4.6% annual yield.