earnings

[selkirk]

was going to add these earnings to the oil thread but will also be doing some updates of some other companies...

so will update CNQ,ECA, TLM, and Tek (which just trades on Toronto). looks like oil is going back up, thought it would fall to $45..(hard to ever guess the direction...at least for me. have investments in this sector and a portion in cash waitng for a pullback...which may not come...

should note ECA and CNQ are going to split 2 for 1. just in case you notice they dropped in half one day. Canadians hate expensive stocks over $60, it is common for companies to split once they reach this level of $60-$70cdn.

large amount is owned by Americans but the companies will probably continue to do this practice.

1. CNQ $70.82cnd. $57.25US figures in Cdn. $
2005 cash flow/share $17.75 $18
2006 $18-$18.20

2005 earnings per share $7.50-$7.60
2006 earnings per share $7.90-$8

dirlled 503 wells; 89% success rate

2005 production will be 7-15% higher than last year

Q1 production was 11% over last year

Horizen project is Cdn. oil sand project which will cost $10 billion (hopefully)
production from Horizen
2008 110,000 Barrels a day
2010 155,000 barrels a day
increasing to 2012 232,000 barrels a day

raised quarterly dividend to .1125 from .10

note: would rate the stock a hold at current prices but if you are bullish on oil/gas then a good long term holding.

risks if the Horizen project goes over budget, that is not uncommon. though they are taking a slower approach than some other companies.

holdings: have $45 Cdn. Aug puts out.
also own the stock and have covered calls at August $64, November $66, $68 cdn.
average cost $48 (counting option premium)

2. ECA $86cdn. $69.55US

Encana increased their natural gas reserves by 28% (assuming $5 natural gas or greater)

1.2 billion dollar buyback up to 10% of the outstanding shares.

cashflow/share 12.90-$13 05
2006 $15.80-$16

Earnings per share $5.70-$5.90 2005
2006 $7.50-$7.75

plan on selling $3 billion of non core assets.

sold Gulf of mexico assets for $2 billon, was on the books at a book value of $500 million.
after taxes will have a profit of 1 billion.


note: rate hold/buy. this is the largest natural gas producer in North America. with excellent management. in the past when they made a large purchase often could question the valuation.

but after a year or two it always seems to work out and the price seems cheap/fair.

own 269 shares (most from a drip/spp of Alberta Energy and when CP broke up, owned it for 5years + so low average cost)

have many put options out on the company ranging from $50-$60cdn. due in the next 3-6 months.

3. Tailsman TLM $39.85cdn. $32.13US

earning per share $4.20-$4.30cdn. 2005
2006 $4.90 $4.95

cash flow per share 10.95/$11.05 05
2006 $11.60- $11.80

Q1 2005 cashflow per share $2.54
Earings per share .99

2005 production should be 455,000-485,000 (barrels per day)

production in Q1 grew 5% year over year and 2% since last quarter

oil price realized in the quarter $55.40US
natural gas $6.73

note: own 500 with covered calls @40 cdn.
wrote put various months strke price $32, and $34cdn.

target is $42.50cdn.

good management and growing production, they sold their Sudan projects which helped the valuation. (will discuss that later but at one time many people (idiots??) believed this company was pure evil for their holdings in the Sudan. got a good price and left the country.


will update Enbridge (pipeline) and Tek.sv.b (base metals trade on Toronto)

thanks
selkirk

 

[selkirk]

Enbridge Q1 $1.22

2005 earnings/share $3.20-$3.30
2006 $3.35cdn-$3.45

company plans to expand their pipelines to the US midwest, spending $200-450 million over the next 3 years.

this is just a good boring pipeline stock. you may want to look at other TRP (transcanada) but unlike TRP never cut its dividend.

yields over 3.5%, good management and earnings growing (slowly) and more divdend increases.

if you are looking for 5-10% counting divdends this is a good stock. suggested it for someone who posted on a defunct website 2 years ago.
as a retirement stock, then around $45.

currently $65cdn. would rate it a hold short term.
long term buy.

company should not do much in the next 3 months. but a good stock long term.
note: own some in a drip/spp, had the stock for 10 years.
trades tsx,nyse.

TEK.sv.b TEK (trades in Toronto)

good base metals company, zinc,copper,coal,ect.
TEK.sv.b $38cdn.

2005 earnings $5.20-$5.30
2006 most people believe metal prices are going down. it depends what the base metal prices due in 2006. so estimates can run from $3.50-$5.50.

company increased the dividend in november from .20 to .40.

then just recently increased it again paying another
so the dividend has gone from .20 to .80

the dividend will cost the company $160 million a year.

they have 405 million long term debt
cash balance of $1.15 billion
cash flow this year should be over 1 billion.

so they can afford the dividend. most base metal stocks pay low dividends because of very volatile earnings.

sold over 8 million in power sales, when base metal prices collapsed years ago they shut down some of their mines and just sold the power.

good company that I believe is very cheap.
short term hold

so if it is cheap, why hold, because the stock was at $44 cdn. just a few weeks ago, and now at $38cdn.

when the market want to sell oil, resource stocks these stocks fall, would make no difference if they doubled the div again. so best to wait until see it moving higher.


note: wrote $32 May (20 contracts), $26 May (20 contracts)hopefully expiring next week (friday),

wrote 5 contracts Nov $36 puts, probably too early....

also own some and have covered calls, similar to the MR. GIC play. in fact the same, but larger amount.


thanks
selkirk