Canadian Oil Sands COS (formerly COS.UN)

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Mike Schimek
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Re: Canadian Oil Sands COS (formerly COS.UN)

Post by Mike Schimek »

Looks cheap to me too, bought a bit.

Only negative is shale oil seems to cost close to $20 less/barrel to produce.

When I last looked at shale oil projections I seem to recall looking at charts that go up then taper off sometime down the road. Now the charts go up and up and up... and it's at cheaper cost than our oil sands.

That's the only thing that would give me pause re buying a lot, but I have not researched this much.
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Re: Canadian Oil Sands COS (formerly COS.UN)

Post by Shine »

Read some comments today on another web site and the "expert" said that COS has serious problems with their own infrastructure, as well as a history of fires and explosions, suggesting significant impending capital costs to upgrade their facilities at the same time as facing declining income due to the drop in the market price of oil.

Something to think about I suppose.
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Re: Canadian Oil Sands COS (formerly COS.UN)

Post by Spidey »

It seems to be one of those range bound stocks - buy below $19 and sell above $22 all the while having the dividend to cushion the ride. Not a long term hold but not a bad one for "play money" if one is so inclined. This time I think I'll take a look if it drops significantly below $18.

By the way, I've heard that many are underestimating the profitability of Canadian energy producers because oil is falling relative to the American dollar rather than the Canadian dollar. Much of the energy selling is done by Americans who don't fully appreciate this.
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Re: Canadian Oil Sands COS (formerly COS.UN)

Post by Taggart »

With no long term record of "consistent" dividend growth, COS isn't even on my watch list, let alone in the portfolio. Although I do invest in the energy sector, this is just not the type of stock I'd be interested in purchasing.
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Re: Canadian Oil Sands COS (formerly COS.UN)

Post by AltaRed »

Taggart wrote:With no long term record of "consistent" dividend growth, COS isn't even on my watch list, let alone in the portfolio. Although I do invest in the energy sector, this is just not the type of stock I'd be interested in purchasing.
It is essentially an income stock not unlike what Bell Aliant used to be. It all depends on what a senior in withdrawal phase is looking for. It was a 475% bagger for many of us leading up to the 2008 crisis where I was fortunate enough to take all my profits off the top at that time. It has the potential to grow its dividend again once it's dev capex winds down. IOW, it has a place in some portfolios.
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Re: Canadian Oil Sands COS (formerly COS.UN)

Post by Taggart »

AltaRed wrote:
Taggart wrote:With no long term record of "consistent" dividend growth, COS isn't even on my watch list, let alone in the portfolio. Although I do invest in the energy sector, this is just not the type of stock I'd be interested in purchasing.
It is essentially an income stock not unlike what Bell Aliant used to be. It all depends on what a senior in withdrawal phase is looking for. It was a 475% bagger for many of us leading up to the 2008 crisis where I was fortunate enough to take all my profits off the top at that time. It has the potential to grow its dividend again once it's dev capex winds down. IOW, it has a place in some portfolios.
I don't deny that other investors have made money with stocks like Canadian Oil Sands or Bell Aliant, but neither of these companies would fit my comfort zone. I have found over the years, that I've done better as an investor focusing on what a company does with it's dividend, rather than the dividend yield itself. As for promises of dividend increases in the future, I expect a company to show signs of at least making the effort over a period of "at least" three years. Don't just talk about it. Show me. That's what I expect from any company like COS. Then when I see some consistency in dividend increases, I can start to look at other attributes, if any, so that just perhaps, it might make a decent long term investment, I can just sit on. I'm certainly not looking for trading swings.

As for withdrawal phase, the only thing we have planned is the forced withdrawal from the RRIF's starting in about six years time. Other than that, it's the same for my wife and I in retirement as it's been in the past. Live within our means, have an emergency fund, don't carry debt, save a percentage of our income and re-invest each year. We are certainly not rich by any means, but we're happy and we seem to manage fine, which is all that matters.

Companies with dividends growing faster than any yearly salary increases I received, especially in the last fifteen years of my former work life, have had a huge impact, both in personal satisfaction, and in the taxable Canadian dividend growth portfolio itself.
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Re: Canadian Oil Sands COS (formerly COS.UN)

Post by bpither »

... it's the same for my wife and I in retirement as it's been in the past. Live within our means, have an emergency fund, don't carry debt, save a percentage of our income and re-invest each year. We are certainly not rich by any means, but we're happy and we seem to manage fine, which is all that matters.
Same here!

Dividend Energy stocks with major distribution outlets - think Chevron with it's consistent dividend growth even during 2008/09 - are a safer bet than COS or much touted Crescent Point in my view. Sure the initial yield is great for income hungry investors, but with patience and time the income on your CVX purchase price rises while the capital gains - save for the credit crunch years - follows a similar trajectory.
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Re: Canadian Oil Sands COS (formerly COS.UN)

Post by trf1066ca »

Mark Carney: most fossil fuel reserves can't be burned
The governor of the Bank of England has reiterated his warning that fossil fuel companies cannot burn all of their reserves if the world is to avoid catastrophic climate change, and called for investors to consider the long-term impacts of their decisions.

According to reports, Carney told a World Bank seminar on integrated reporting on Friday that the “vast majority of reserves are unburnable” if global temperature rises are to be limited to below 2C.

Carney is the latest high profile figure to lend his weight to the “carbon bubble” theory, which warns that fossil fuel assets, such as coal, oil and gas, could be significantly devalued if a global deal to tackle climate change is reached.
[]
Carney issued a stark warning over the lack of long-term thinking by governments and businesses, warning that a so-called “tragedy of horizons” could lead to market failure.
More in this article http://www.emergingmarkets.org/Article/ ... quote]Mark Carney has re-emphasised his support for the idea that oil companies’ reserves could be stranded assets – still valued by investors, but ultimately going to embody losses.

“The vast majority of reserves are unburnable,” the Bank of England governor said – if the world is to avoid catastrophic climate change.

Thinking of hydrocarbon deposits as stranded assets has gained prominence in recent years, helped by movements like the US student drive to persuade university endowments to disinvest from fossil fuel companies.

Climate science indicates that if the world is to cut CO2 emissions enough to avoid disastrous global warming, all the world’s already discovered oil reserves cannot be burnt. Yet such reserves still constitute a big part of the value of companies like ExxonMobil and BP – and few large investment firms have yet accepted the stranded cost analysis...

...He referred to a “tragedy of horizons” – the market failure by which actors including some investors, companies and governments are not looking far enough ahead to coming problems like the environment, even though these are known to them.[/quote]
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Re: Canadian Oil Sands COS (formerly COS.UN)

Post by AltaRed »

Fossil fuels will still be burned for centuries, though their share of the mix will decrease. Whether it means the rate of consumption stops increasing, or even starts to decline, too much of our world depends on hydrocarbons for a very long time. I do foresee that commodity prices will stall and hence new developments will stall.......eventually.
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Re: Canadian Oil Sands COS (formerly COS.UN)

Post by trf1066ca »

Well, Carney is saying that about 3/4 of the reserves we have NOW are going to need to be stranded, left in the ground. So, a bit of a difference of opinion, and the investing strategy that potentially ends in tears and ruin is ignoring Carney, whereas you can largely ignore fossil fuel stocks in a portfolio and still do ok, presumably.

And relentlessly saying that all the reserves and more will be burned won't have any effect on whether they are or aren't. It's an insight about as profound as saying "If there are no changes to business as usual, then it will be business as usual." Or, "Given x, x." Which is not going to be much help if the underlying assumption is misguided.
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Re: Canadian Oil Sands COS (formerly COS.UN)

Post by AltaRed »

Until we have nuclear aircraft, battery operated military equipment, farm and construction machinery and stop consuming perhaps 80% of the consumer products we have today with petroleum products in them, we will need oil in some quantities. Much of the developing world does not care what Carney thinks. Carney should stick to what he knows.

I am not the least bit concerned about the most efficient of my resource related investments, but would not invest in companies operating at the margin. Oil prices, for example, will likely decrease in real terms over the next 30-50 years.
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Re: Canadian Oil Sands COS (formerly COS.UN)

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AltaRed wrote:Until we have nuclear aircraft, battery operated military equipment, farm and construction machinery and stop consuming perhaps 80% of the consumer products we have today with petroleum products in them, we will need oil in some quantities. Much of the developing world does not care what Carney thinks. Carney should stick to what he knows.

I am not the least bit concerned about the most efficient of my resource related investments, but would not invest in companies operating at the margin. Oil prices, for example, will likely decrease in real terms over the next 30-50 years.
Ah. I see what you did there. You said "as long as nothing changes, then nothing will change."
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Re: Canadian Oil Sands COS (formerly COS.UN)

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trf1066ca wrote: So, a bit of a difference of opinion, and the investing strategy that potentially ends in tears and ruin is ignoring Carney, whereas you can largely ignore fossil fuel stocks in a portfolio and still do ok, presumably.
This is a very interesting topic but far, far too broad to be under an individual stock thread. I would suggest you create something along the lines of an "Impending Doom of Oil" thread where you can show trends, etc. demonstrating how oil use is or will be on the decline.

By the way, my Spidey senses are telling me that your initial inclination will be to believe that I'm being facetious but I do think it would be a good topic.
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Re: Canadian Oil Sands COS (formerly COS.UN)

Post by Shakespeare »

Canadian Oil Sands profit plunges 65% in quarter - The Globe and Mail
Production reductions have become the norm for this aging mining project. Syncrude chopped production guidance three times in 2013 because of hiccups at its major facilities....

The company brushed off falling oil prices. “With spending on major capital projects coming to an end, [Canadian Oil Sands] is positioned to fully fund its business in this current environment of lower crude oil prices,” the press release said....

“We [Suncor] and the operator [Imperial] [have] been disappointed in the performance of the assets....
May drop further tomorrow.
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Re: Canadian Oil Sands COS (formerly COS.UN)

Post by AltaRed »

Perhaps but I believe that should be baked into the price if investors have been doing their homework. There is nothing new in that news release for me that I did not anticipate when I purchased shares recently. However, those with not yet a stake but have been contemplating a position may want to put in a stink bid in tonight for what is likely to be an early rout before settling back up. There is little question in my mind that the skies will be sunnier by next quarter's results.
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Re: Canadian Oil Sands COS (formerly COS.UN)

Post by Sensei »

Hi,

Like a few others upthread, this stock has never interested me and especially today. The stock is not being mis-priced, but simply following the economic reality of now.

As a company, it has been inconsistent in many ways. Recently, the share price seems volatile to me. And, as Taggart pointed out, dividends have most certainly been inconsistent with a cut thrown in. The last quarter was terrible. With world oil prices hovering where they are, and not set to change anytime soon, I don't see a good year ahead for COS either. A dividend cut is not out of the question. Production there just can't be profitable at $80 something a barrel. I stand to be corrected perhaps, but even so, profit margins if any will be thin.

In the world oil patch, it is a one trick pony. Everything rests on continued development in the oil sands region which I don't think is is given. As such, COS is not well enough diversified for me. World trends such as increased automobile efficiency, consumer environmentalism, slowing world growth, suggest less profitable and less environmentally friendly regions may lose their mojo. That seems to describe the oil sands and therefore will affect COS.

I still prefer to play the oil sands through the majors such as CVX and RDS.B. I still have a love/hate relationship with CPG, but continue to hold as being more diversified and more in tune with recent developments in the US in terms of how we exploit more amenable oil reserves.
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Re: Canadian Oil Sands COS (formerly COS.UN)

Post by Flaccidsteele »

trf1066ca wrote:Well, Carney is saying that about 3/4 of the reserves we have NOW are going to need to be stranded, left in the ground. So, a bit of a difference of opinion, and the investing strategy that potentially ends in tears and ruin is ignoring Carney, whereas you can largely ignore fossil fuel stocks in a portfolio and still do ok, presumably.
Definitely.
trf1066ca wrote:And relentlessly saying that all the reserves and more will be burned won't have any effect on whether they are or aren't. It's an insight about as profound as saying "If there are no changes to business as usual, then it will be business as usual." Or, "Given x, x." Which is not going to be much help if the underlying assumption is misguided.
I never understood this argument either. Chicken will be eaten by humans for a long time too. That's not a particularly interesting discussion point.
Flaccidsteele wrote:Chicken will still be eaten for centuries, though their share of the mix will decrease. Whether it means the rate of consumption stops increasing, or even starts to decline, too much of our world depends on food for a very long time. I do foresee that commodity prices will stall and hence new developments will stall.......eventually.
I'm sure that an individual can make a lot of money investing in oil (and chickens), but the [insert commodity] has always been used for centuries is, at least for me, an uninteresting discussion.

"Has been used for centuries" is somewhat related to the "they're not making any more land" observation some individuals use to purchase property.

("I disagree." - volcano)

But hey, different strokes for different folks...

My apologies for going OT...
Last edited by Flaccidsteele on 31 Oct 2014 01:09, edited 1 time in total.
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Re: Canadian Oil Sands COS (formerly COS.UN)

Post by Mike Schimek »

Perhaps but I believe that should be baked into the price if investors have been doing their homework. There is nothing new in that news release for me that I did not anticipate when I purchased shares recently.
Their annual production guidance - first 3 quarters that we already know numbers for = very interesting Q4 production projection...
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Re: Canadian Oil Sands COS (formerly COS.UN)

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trf1066ca wrote:Mark Carney: most fossil fuel reserves can't be burned
The governor of the Bank of England has reiterated his warning that fossil fuel companies cannot burn all of their reserves if the world is to avoid catastrophic climate change, and called for investors to consider the long-term impacts of their decisions.

According to reports, Carney told a World Bank seminar on integrated reporting on Friday that the “vast majority of reserves are unburnable” if global temperature rises are to be limited to below 2C.

Carney is the latest high profile figure to lend his weight to the “carbon bubble” theory, which warns that fossil fuel assets, such as coal, oil and gas, could be significantly devalued if a global deal to tackle climate change is reached.
[]
Carney issued a stark warning over the lack of long-term thinking by governments and businesses, warning that a so-called “tragedy of horizons” could lead to market failure.
More in this article http://www.emergingmarkets.org/Article/ ... quote]Mark Carney has re-emphasised his support for the idea that oil companies’ reserves could be stranded assets – still valued by investors, but ultimately going to embody losses.

“The vast majority of reserves are unburnable,” the Bank of England governor said – if the world is to avoid catastrophic climate change.

Thinking of hydrocarbon deposits as stranded assets has gained prominence in recent years, helped by movements like the US student drive to persuade university endowments to disinvest from fossil fuel companies.

Climate science indicates that if the world is to cut CO2 emissions enough to avoid disastrous global warming, all the world’s already discovered oil reserves cannot be burnt. Yet such reserves still constitute a big part of the value of companies like ExxonMobil and BP – and few large investment firms have yet accepted the stranded cost analysis...

...He referred to a “tragedy of horizons” – the market failure by which actors including some investors, companies and governments are not looking far enough ahead to coming problems like the environment, even though these are known to them.
[/quote]


Florida, California and part of western US are already having problems with climate change affecting our food supplies and prices. Car and house insurances are going up because of the more frequent and severe flooding in the last few years. So it is not surprising that Carney is throwing his weight on the issue.

Even without this issue, I am never a fan of COS because a lot of things can go wrong i.e. too many relatively speaking e.g. oil price tanking, plant breakdown, fire, human errors, and comparatively 'short reserve' which will likely be unprofitable when in 'old age', in my opinion, when the peak is reached and starting continue declining production heading to the twilight years.
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Re: Canadian Oil Sands COS (formerly COS.UN)

Post by Shakespeare »

Bought another 200 COS today, bringing my average price to 16.28.
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Re: Canadian Oil Sands COS (formerly COS.UN)

Post by Justise »

May put a stink bid at just below $10 base on the triple waterfall theory if oil price drops to $60.
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Re: Canadian Oil Sands COS (formerly COS.UN)

Post by trf1066ca »

I just bought some New Balance 80v.2's zero-heel running/hiking shoes. And a knockoff "Go Pro" camera from Black's, with waterproof/shockproof case, handlebar and helmet mounts, and a remote. $99.00 all-in, + tax.

No dividends, but I like this better, knowing about the zero terminal value, etc.
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Re: Canadian Oil Sands COS (formerly COS.UN)

Post by Dejavu »

Bought 100 COS @ 14.95 this am. It kept falling to $14.32 last I saw. "Beware the falling knife" Dejavu.
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Re: Canadian Oil Sands COS (formerly COS.UN)

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Dejavu wrote:Bought 100 COS @ 14.95 this am. It kept falling to $14.32 last I saw. "Beware the falling knife" Dejavu.

Got 350 shares @ $14.44 this a.m. finally putting some cash to work after missing out on the last sale.
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Re: Canadian Oil Sands COS (formerly COS.UN)

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trf1066ca wrote:I just bought some New Balance 80v.2's zero-heel running/hiking shoes. And a knockoff "Go Pro" camera from Black's, with waterproof/shockproof case, handlebar and helmet mounts, and a remote. $99.00 all-in, + tax.

No dividends, but I like this better, knowing about the zero terminal value, etc.
You realize you've posted this in a thread about a "dirty" oil sands stock? :P
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