(Business Edge writer David Hatton regularly profiles the top stock picks of some of Canada's most accomplished investment pros.)
FEATURED PRO: Josef Schachter is president of Schachter Asset Management Inc., a Calgary firm that specializes in institutional research in the oil and gas sector.
Jason White, a researcher with Schachter Asset Management, provided some research assistance with the firm's investment strategy.
Investment strategy: "Right now (with current market volatility), it's a very good buying opportunity if you can look at the proper time horizon. You need to look at a lot of these companies as a long-term investment. This is also a good time of year to be buying. At the start of winter, everyone is thinking about heating their homes and oil and gas becomes popular. In the spring, when temperatures start to warm up, this is when you want to buy the right companies."
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| Josef Schachter |
FIRST STAR
* Oilexco Inc. (TSX:OIL)
* Recent Price: $14.20
* 52-Week High/Low: $17.92-$7.21
* Snapshot: Oilexco Inc. is involved in oil and gas exploration, development and production.
* President and CEO: Arthur Millholland
* Head Office: Calgary
* Vital Stats: Price/ Earnings Ratio (trailing 12 months), 30.20; Revenue (last fiscal year), $3.73 billion; Earnings Per Share, $0.47; Market Cap, $3.2 billion.
* Schachter's View: "Oilexco is currently trading at two-and-a-half times cashflow. They have shown great success at their Huntington site lately and a few others. This has always been one of our favourites.
We currently have a price target of $25 by 2010 and it can certainly go higher if they continue to build on their current successes."
* Risk Rating: Medium
* Web Watch: www.oilexco.com
SECOND STAR
* Accrete Energy (TSX:GZ)
* Recent Price: $4.89
* 52-Week High/Low: $6-$3.52
* Snapshot: Accrete Energy Inc. is involved in the acquisition, exploration and development of oil and gas properties.
* CEO: Peter Salamon
* Head Office: Calgary
* Vital Stats: Price/Earnings Ratio (ttm), 21.30; Revenue (last fiscal year), $39 million; Earnings Per Share (ttm), $0.23; Market Cap, $80 million.
* Schachter's View: "We believe our 12-month price target of $8 is achievable with Accrete. They're a small Western Canada-based oil and gas producer. The stock is currently trading at 60-per-cent net value. Claresholm and Harmattan (areas) are doing strongly. It's a well-run company with good potential."
* Risk Rating: High
* Web Watch: www.accrete-energy.com THIRD STAR
* Delphi Energy (TSX:DEE)
* Recent Price: $2.09
* 52-Week High/Low: $2.40-$1.27 (03/06-03/20)
* Snapshot: Delphi Energy Corp. is involved in the acquisition, exploration and development of oil and gas properties.
* Vital Stats: Price/Earnings Ratio, n/a (ttm); Total Revenue, $95.18 million; Earnings Per Share, -$0.19; Market Cap, $157 million.
* CEO: David Reid
* Head Office: Calgary
* Schachter's View: "This is a similar story to Accrete (above) where you have a company operating at below NAV (net asset value). They recently swapped a long-life play area for some multi-zone assets in Hythe, northwest of Edmonton. Right now, Delphi is operating at about 60 to 70 per cent of NAV and is fairly cheap on cashflow. There was formerly a high debtload, but that's been since cleaned up."
* Risk Rating: High
* Web Watch: www.delphienergy.ca
* Schachter's Edge Record (last 12 mo.): 14 per cent. Best Pick: Oilexco (TSX:OIL), 57 per cent. Worst Pick: Real Resources (TSX:RER), -17.3 per cent.
NOTE: Schachter Asset Management provides research on the featured companies for Maison Placements Canada and members of Schachter Asset Management have positions in all three stocks.
(This feature is provided for informational purposes. Investors are advised to do their own research or consult a qualified investment professional before making investment decisions.)
