Canadian Yield Plays

03/24/2014 6:00 am EST


Roger Conrad

Chief Analyst/Managing Partner, Capitalist Times

Roger Conrad, discusses how the recent decline in the Canadian dollar has made several of their energy companies look even more appealing, in terms of yield.

TERRY:  I'm Terry Savage from talking with Roger Conrad, partner in Halcion Capital Partners, but more importantly the man who is known to have the best ideas for finding income in strange places and now I want to focus on Canada, maybe not such a strange place but a spot where investors can find higher yielding products. 

ROGER:  Absolutely, and you know, your US dollars go about 10% further than they did buying Canadian stocks a year ago, of course the flip side is if you've owned Canadian stocks you've seen a depreciation as the currencies come down. 

TERRY:  But now someone who has money, what do you buy in Canada and how do you go buy it? 

ROGER:  Well, I like the energy companies.  A lot of companies have actually listed New York, so they're very easy to buy, companies like Crescent Point Energy which just listed its securities New York just in the last few days.  Prolific Light oil producer has done a very good job getting its oil to market, and strong finances and a really nice yield over 7%. 

TERRY:  That's attractive to many people.  Are these energy producers going to continue these high yields, especially as we find more oil in the US? 

ROGER:  Some will and some won't, I think.  The biggest problem the North American energy producers have is transportation, lack of pipelines, so you see a lot of oil shipped on rail, barge, truck, anything they can do it, but still you see these tremendous price differentials open up where the benchmark oil price is far more than say what an Alberta producer can sell it for.  This is a problem that's only going to be solved by building more pipelines over a long period of time. 

TERRY:  So are there some pipeline companies you'd invest in as well? 

ROGER:  Well, definitely so.  I like TransCanada, I'm not sure if the Keystone pipeline is going to be approved, at least not any time soon, but they do have a lot of other projects out there and I think again with the Canadian dollar discount it's cheap. 

TERRY:  Now, just tell our listeners one more thing, if you buy a Canadian company listed on the New York stock exchange, there's no currency impact really, but how about buying Canadian stocks up in Canada?  Then you get a currency risk or benefit as well as the investment yield. 

ROGER:  I think it really depends on your broker.  Some brokerages can really do good business on the Toronto, they don't charge you an arm and a leg for trades.  Some will charge you an arm and a leg for trades, so I think investors should definitely find out what the policy is and who they're using. 

TERRY:  All right.  Now, where do people find your list of recommended energy stocks including those from Canada? 

ROGER:  Well, we have a couple of publications but if you come to we'll be happy to tell you all about what we have. 

TERRY:  Okay, Roger Conrad,  I'm Terry Savage for the web site.

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