Fyi...see FP interview with Joanne Hruska below. Guess what she's buying???....yup...AXL!!! Sweeettt!!!!
For any of you that may have been living in a cave for the past couple yrs :) ....if you don't know of Joanne...suggest you do some DD pronto. Gals got a cute quirky little personanlity...but her most attractive feature is her cute little nose that has repeatedly proven the ability to sniff out the screamin buys way ahead of the the rest of the heard! This gal lives and breathes O+G plays...and when she buys....i've learned to take note.
I know i'm likely crossing the line into pumper territory...to much coffee and adrenaline this morning...but IMHO...you could completely discount the massive insider buying at AXL, the $2.20+ book value, cardium drilling and massive shift to oil, pending cardium drill results...yada yada....and buy this play on it's TA alone. Volumes up big time, and charts/technicals are looking extremely bullish indeed.
I've gotta couple really promising plays i was looking to put more money into and was looking at what i could take some profits on to swift into them...and for a second there gave AXL some thought...then after reading that Joannes buying, then looked at the charts and company again....then i gave myself a good slap. I'll find the money elsewhere:)
Manager: Joanne Hruska, Aston Hill Financial
Fund: IA Clarington Energy Class
Description: Global, all-cap equity fund, can invest in any energy sub-sector
Firm’s AUM: $3-billion
Performance: 6-month +17.08%
Management fee: 2.25%
Despite their recent gains, Joanne Hruska is confident that energy service and refining companies still have room to run. As a result, the portfolio manager is maintaining her overweight position in these sub-sectors.
Some of these holdings are Canadian, but many are international players. This reflects her goal to differentiate the IA Clarington Energy Class from the average Canadian energy fund, often dominated by domestic producers.
It also is a result of the fact that while Canada and North America currently appear busier, activity is ramping up in many places around the world. Therefore, investors would be wise to have some global exposure.
“We still think there is room in Canada, but we think there is a lot more room internationally to catch up on the upturn in services,” Hruska says.
The fund has a heavy weighting in U.S. names, many of which have significant international exposure, such Cameron International Corp. Roughly 60% of its revenue comes from outside North America.
“Even though the stocks look like they are starting to firm up, many analysts are quite low on their earnings estimates,” Hruska says.
She points out that in 2004, it took analysts’ earnings per share estimates two years to catch up to what big U.S. service firms like Schlumberger Ltd. were actually putting up. So if this up-cycle in energy continues, the manager believes analysts will again be proven gun-shy.
Hruska has also diversified the portfolio through names like Suncor Energy Inc., which is a major player in the Canadian oil sands, but also has 30% of its production linked to Brent oil prices.
“We see the continued outperformance of Brent in the near term over WTI,” the manager says, noting that oversupply and lack of takeaway capacity in the Cushing, Oklahoma area is suppressing WTI prices.
BUYS
Hess Corp. (HES/NYSE)
Why do you like it? Hess provides catalyst-rich exposure to the global exploration up-cycle that we believe is just beginning.
What’s the upside? They just doubled their production in the Bakken, have 90,000 acres in the Eagleford, and operations in Brazil, Africa, Europe and Australia.
The biggest risk? That their active exploration program with several high-risk, high-impact wells in the coming months, disappoints.
Describe the position: We hold a slightly overweighted position in the fund.
Anderson Energy Ltd. (AXL/TSX)
Why do you like it? Anderson has historically been a gas-weighted company and therefore trades at a discount to the peer group.
What’s the upside? Recent impressive success in the Cardium and a 2011 drilling program containing no gas well targets (primarily Cardium) will shift the production mix and should close the valuation gap.
The biggest risk? Production is currently about 70% gas, so until the Cardium growth program succeeds, they will remain vulnerable to weak gas prices.
Describe the position: First bought for other funds in 2009 and have traded it over the years. We have added to the position recently.
Pace Oil & Gas Ltd. (PCE/TSX)
Why do you like it? Pace is currently a gas-weighted intermediate trading at a large discount to its peers. With a high degree of oil additions in 2010 and a 25% production growth target for 2011, they expect to exit 2011 with a 50% weighting to oil.
What’s the upside? Pace plans to drill and/or complete about 8 Pekisko wells (among others) in northwest Alberta and results are expected around May. This could be very material for the company as they have a large land position here and success would infer significant future value.
The biggest risk? If the Pekisko wells are unsuccessful the stock could see a pullback.
Describe the position: First purchased in Nov. 2010 and have been adding to on pullbacks.
SELL
TransGlobe Energy Corp. (TGL/TSX)
Why don’t you like it? Although TransGlobe just reported decent reserve additions for 2010, the entirety of these additions came from operations in Egypt. This is an area, for obvious reasons, I would prefer to avoid right now.
What is the downside? Approximately 75% of its reserves are in Egypt (the other 25% are in Yemen), so a prolonged struggle there could be highly detrimental.
A potential positive? A resolution and maybe even a new democratic government would be very positive for TransGlobe, but I’m not willing to bet on when or if that will happen.
Describe the position: We don’t own TransGlobe.