By Angela Harmantas
What a week it was for oil, and according to a major rating agency there doesn’t seem to be an end in sight. Today on Smallcappower we give you our picks for companies in Canada’s oil patch that may actually thrive during the price weakness. Elsewhere, we’ll be watching the developments happening in Alberta as the province tries to work out a critical new royalty regime that will have far-reaching implications and give you a few helpful tips as a small cap investor – here’s what you need to know today:
Whenever I think we’ve hit the bottom for oil prices, the market tells me otherwise. Last Friday, prices fell to US $41.35 before ending the day at $42.14, and rating agency Moody’s predicted weak energy prices to last until at least 2018. That’s not to say that there aren’t good entry points for the risk-friendly investor in the Canadian oil patch. Our crack team of analysts picked out five energy juniors that we think could thrive in a low oil price environment (hint: look for a healthy EBIDTA and low debt levels).
Speaking of oil, our eyes will be focused on Alberta’s provincial government this week after its promise to provide more details about its royalty review process. The NDP government has already chosen members for a climate change panel, and it’s rumored that they’ll ask the general public to provide input to the discussions. While we shouldn’t expect any major overhauls to royalties just yet, today’s Globe and Mail has a great article explaining why it’s so important that the province gets the process right.
We obviously love talking about small cap stocks here at Smallcappower, but we know that investors have had a rough time of it the past few months as huge share price declines translate into significant losses. I love this article in Friday’s Financial Post that talks about five things to remember when investing in small cap stocks. What do you think about small caps after this summer’s rout – are they still attractive to you, and if so, which ones?
Do you have a burning question you’d like answered by an investment expert or analyst? Let me know and I can post the answer here in the blog. Contact me by email at angela@smallcappower.com or on Twitter: @aharmantas.
