How three fund managers are playing the energy bull market

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Investors may move money into mid-cap companies as the cycle progresses

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“This cycle is going to take 10 to 15 years to play out, and we’re four years into it,” says Mr. Szybunka, who manages Canoe Energy Portfolio Class and Canoe Energy Income Portfolio Class funds. That discount stems from a lack of awareness that it also holds land in the oil sands and the Clearwater oil play, as well as owning drill rigs and 31.5 million shares of Nuvista Energy Ltd., one of the four largest U.S. fracking firms that have 70 per cent of the domestic market. Liberty, which focuses on advanced technologies, trades attractively at less than three times cash flow.

Currently, there is some geopolitical risk built into the oil price, he acknowledges. That stems from supply concerns arising from Middle East tensions and tit-for-tat drone attacks between Iran and Israel. When it does, “we expect increased capital returns going back to shareholders that can drive the stock to outperform,” he says.. It’s a high-quality business with a solid balance sheet, strong management and a record of delivering on its operations, he says.

“I have taken a bit of oil exposure out of my energy and Canadian equity funds,” says Mr. Gillis, portfolio manager for CI Global Energy Corporate Class Fund and CI Canadian Investment Fund.

 

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