Mason Granger is portfolio manager with Sentry Investments. His focus is on oil and gas stocks.
Top Picks:
Longview Oil
We view Longview as a relatively low-risk investment in energy with an attractive yield of 6.0%. We like the company's low decline rate production base, oil and liquids focus and solid financial position. We believe that the largest shareholder, Advantage Oil & Gas, is likely to reduce its 63% stake in the company and this would remove a key overhang on the stock.
(Last purchase was February 1, 2012 at $10.00/share)
Spartan Oil Corp
We like Spartan because of their large and contiguous light oil asset at Pembina and low-risk, repeatable development inventory. The recent equity financing has Spartan well funded to achieve considerable growth in production and cash flow in 2012.
(Last purchase was March 22, 2012 at $4.10/share)
Whitecap Resources
(Last purchase was March 6, 2012 at $9.20/share)
Whitecap is a top pick of ours because of the significant weighting to crude oil, with one of the best growth profiles in the intermediate group. Whitecap is building a sustainable low-risk asset base and is likely to pursue a dividend paying model in 2013. It is our view that the shares will re-rate positively with this transition.
Past Picks: Oct. 13, 2011
Trilogy Energy
Then: $31.08
Now: $26.57
Total return: -13.95%
Wild Stream Exploration
Then: $9.50
Now: $9.86
Total return: +3.79%
Longview Oil
Then: $9.15
Now: $9.47
Total return: +6.64%
Total Return Average: -1.17%
MARKET OUTLOOK
In the near-term, we have a cautious view of global oil prices given the significant geopolitical risk premium and unknown outcome of Middle East tensions. First-quarter results for many Canadian companies may disappoint because of wide North American crude oil differentials and an earlier-than-normal spring break-up in Western Canada, which has impacted winter drilling programs. We continue to see little reason why natural gas will be able to stage a durable recovery in 2012 and are concerned about the potential pricing implications of full storage this fall.
Click here to see returns, top holdings and other information for the Sentry Energy Growth & Income fund.
Compiled by Franklin Cameron, BNN Market Call Tonight
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