Crescent Point Energy Corp caught a bounce January 20, 2016

Feb 24th, 2016 – 1 Comment

Low energy prices are hurting the entire sector


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Lou Schizas is an equities analyst, investor, entrepreneur, professor and television and radio personality – and a true believer in the happiness-inspiring powers of capitalism.


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Hi Lou,

Always love reading your analysis and outlook on the different topics that are presented to you– great work. I also learned something today that I can listen to you on AM 640 – what time of the day do you normally have your session and is this available for us Edmonton folks?

I was wondering if you could take a moment and give your perspective on Crescent Point and Veresen . They have always been great performers so I am especially astonished at the punishment that they have take on their stock. Great management teams in place with exemplary past operational performance yet they are the baby in the bathwater toss. Is there something I am totally missing here or is this the typical “ fear “ reaction/syndrome to downward markets and everything gets tossed out?

Any event, always a pleasure to hear from you.

Thanks Lou

Stay well

Angelo

 

Hey Angelo,

 

Thanks for the assignment and your kind words. Here is the link to AM640 so you can avail yourself of my contributions to the John Oakley Show :

http://www.640toronto.com/happycapitalism/

Today I will examine the case for Crescent Point Energy Corp. (CPG TSX) on Friday I will take a look at Veresen Inc (VSN TSX).

This will be the eighth time since 2010 that I have analyzed the particulars for CPG. The last was October 23, 2015 on a request from Laurie. The shares were trading for $18.46 and offering a dividend yield of 6.5%. Laurie wanted a second opinion on how to proceed on a choice between CPG and Cardinal Energy Ltd. (CJ TSX).

It was advised that on a market cap basis and average daily volume that CPG was the pick out of the two. In retrospect that was the right call. Although both are down, CPG is down substantially less.

It was also observed that CPG was labouring under an established downtrend but  had caught a bounce off a 52-week low of $11.31. Concurrently the MACD and the RSI generated buy signals as the stock was moving out of an oversold position. The stock was holding onto a thin ledge of support at $18.00 and there was little evidence of a trend reversal developing in the near term.

Another probe of CPG will give you another perspective on this stock.

 

CPG

The three-year chart depicts a stock that has continued to struggle under an established downtrend. After the October 23rd, 2015 post CPG wasn’t able to hold support near $18.00 and tracked lower to $12.21 on January 21, 2016.

The MACD and the RSI generated buy signals off the January low as the stock advanced to its current value. Make note that the dividend yield is now 7.59%

 

 

 

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The six-month chart highlights the resistance near $17.00 that the shares will have to overcome if we hope to see more from this move. At this point there is scant evidence that we can expect a trend reversal.

If you have missed anything in your analysis it’s that there is a war being fought for domination of the global fossil fuel industry and like any conflict there is always collateral damage suffered by noncombatants.

Next time I will analyze Veresen Inc. (VSN TSX).

 

Make it a profitable day and happy capitalism!

 

 

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