INK Ultra Money Free: Canadian oil & gas is on fire, what's next?
The Fed's not-QE T-bill buying programming which started in mid-October screamed commodity inflation to us. As we have written in many of our research notes over the past two months, we predicted that in contrast to Bernanke's old-school bond buying QE, Powell's money-market focused not-QE would have more of a punch for commodity inflation.
Our attention immediately zeroed in on neglected, if not hated, Canadian oil patch stocks. Low oil & gas prices and gloomy chatter about Alberta separatism was already providing a nice contrarian setup for Canadian oil patch stocks. Then came the Fed and not-QE. That was all we needed to go all-in on Canadian oil & gas.
Fed T-bill buying is a greenlight for commodities
Since getting the Fed's not-QE green light we have highlighted 10 oil & gas stocks in our morning reports for Canadian Club members and INK subscribers.
The first oil & gas stock featured in the INK morning report after the start of not-QE was natural gas and liquids producer Tourmaline Oil (TOU). The out-of-favour company had been setting new lows and had just announced the creation of Topaz Energy, a private royalty and infrastructure energy firm that it expects to potentially partially monetize via a public liquidity event. It has already sold a 26% stake to private institutional investors for $194.5 million in cash. Tourmaline is up 31% since our October 25th report. The company has also been focusing more-and-more on liquids.
Liquids production has become a notable theme that we have picked up over the past two months. Nuvista Energy (NVA) is a prime example. Focused on the condensate-rich Montney formation near Grande Prairie, Alberta, this stock has been one of the top performing morning report stocks over the past two months, up 37% since we featured it in our November 18th report. It is in the same neighbourhood as another liquids-focused junior producer. Listen to the free INK Ultra Money video below to find out the name of the stock which has also been the top performing oil & gas stock (up 40%) that we have highlighted since the start of not-QE.
Doubling down in the Canadian oil patch
Audio download below.
Canadian oil & gas stocks have been some of the best performing stocks in North America since the start of not-QE. So much so that many are approaching over-bought territory as institutional and retail investors alike have scrambled to get some exposure to this neglected area of the market. As such, a correction or consolidation in the group over the next few weeks is a distinct possibility. Fortunately, not-QE does not play commodity favourites.
Although investors may prefer some commodities over others, the Fed's liquidity injections are blind. The challenge is to get a sense of where those Fed dollars are likely to head. Insiders can provide us some clues, and right now they are sending some strong signals at the stock level. The combination of Fed liquidity and tax loss selling by investors is setting up new opportunities beyond the oil patch as we head into the new year.
We already covered a couple of these in our morning report for Canadian Insider Club Ultra members and we will be revealing one of those names in the Globe and Mail on Saturday.
If you are tired of waiting for free videos and reports to come out from INK, now is a great time to get a jump on things and join us as a Canadian Insider Club Ultra member. If you are not already a member of the Canadian Insider Club, join today and save $99 on an Ultra membership every year (until you cancel) by using coupon code BLACKBOX at checkout (valid only for new Club memberships). Make sure to select CIN Research Club Ultra from the subscription type drop down box when registering.
I would encourage you to act now because the sale ends this week and offers deep value for investors who understand the power of our insider research that is not conflicted by sponsorship considerations or stock promotions. In addition to INK and Real Vision video access at INK Ultra Money, you will get all the regular Canadian Insider Club membership benefits:
INK's premium daily Morning INK newsletter delivered to your inbox (Mon-Fri) an archive of recent morning reports (under the Reports section of our website) INK's premium weekly market report in your inbox every Monday 30 free INK Company PDF Report store downloads every month The monthly Top 40 stock report an ad-free experience* Insider filings and press release email alertsThe benefits don't stop there. Every month, we also report on the 20 top-ranked gold stocks and 30 top-ranked stocks in the Energy sector. That's all included in your membership, including recent archives which will be a valuable resource as Canadian stocks benefit from this next phase of central bank monetary easing.
Start the New Year off better equipped to capitalize on an inflation-driven Canadian bull market with a Canadian Insider Club Ultra Membership and take advantage of $99 savings off the regular subscription. Remember, to get the savings redeem the coupon code: BLACKBOX.
Good luck in the final trading days of the 2019 which could very well provide some excellent opportunities for those contrarians with the risk tolerance to seek out stocks that have been oversold during tax-loss selling season which ends Friday.
Disclosure: I hold NVA and TOU.
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