"We are still finding relatively good value in the energy sector," says Michael Sprung in an interview with Mark Thorburn at SmallCapPower.com
Micheal Sprung, President and Chief Investment Officer of Sprung Investment Management was interview by Mark Thorburn at SmallCapPower. Michael discussed his market outlook and top stock picks. Here is an except from the interview:
Mark Thorburn: What sectors do you currently like?
Michael Sprung: Well, in terms of places where we continue to find value, I'd have to say that despite the fact that energy is been amongst the best performing sectors of the TSX so far this year, we're still finding relatively good value. The energy sector as a whole has been up about 14% year-to-date. And despite the fact that we've seen natural gas prices increased by about 12% which I think has surprised people on the upside. However, West Texas Intermediate is only up about 3.5% year-to-date. We've seen a lot of the stocks beginning to run. I think largely as a result of the production increases that we're beginning to see particularly in the U.S. and that is also contributing to the efficiencies in the economy, particularly on the manufacturing side.
So in terms of exposure, we still today like Canada for instance. Canada has really surprised people with some of these things that have done in terms of the recent of IPO of PrairieSky by Encana Corporation (TSE:ECA) at prices above what anybody thought that they might be able to sell that at. That's been a great surprise spinning out of the royalty business in Clearwater. The purchase of the large chunk in Eagle Ford I think has also been particularly a positive surprise to the market. We expect going forward that that will continue to be reflected in positive results in the share price at least over the next number of years.
We also like Cenovus Energy Inc (TSE:CVE) because that's a company where you have fairly predictable production increases over the next number of years. The capital goes again to it. Again, they manage to maintain the cost of that oil sands development to a great extent. It's a very efficient company, a very efficient management and they do have a both upstream and some downstream assets as well.
To learn about Michael's market outlook and other stock picks you can view and read the complete interview at http://www.sprunginvestment.com/stockwatch-five-stock-picks-michael-sprung-sprung-investment-management/