BNN's portfolio manager appearances are a great repository of investment ideas from across the asset management spectrum.
Today, we feature portfolio manager, Robert Lauzon, of Middlefield Resources, who made an appearance on September 13, 2010, to discuss his thoughts and his top picks.
During the appearance, Lauzon, who specializes in investing in the Natural Resources sector, discussed his top 3 picks as well as some of his thoughts for the period ahead. In his opinion, Natural Gas prices should double over the next 12-18 months. Regarding Uranium, he believes that it is moving up, and if and once prices stay solidly at $50, there is likely to be a revaluation in the sector.
In the natural gas sector, he likes Daylight Resources Trust (DAY-T), which he says "has amassed a resource portfolio which allows them to decide if they should overweight oil or gas." "Currently they are overweight oil at 55%, and they have investments in 3 really strong resource plays," said Lauzon.
He is looking for the stock to reach the $11-$12 range. It has a 6% yield and is trading around $9.86.
He also likes Fairborne Energy Ltd. (FEL-T), which he believes holds the best risk/reward potential in the mid-cap gas universe. He says its cheap at $40,000 per Flowing Barrel (Flowing Barrel = EV (enterprise value) divided by production (Boe/d). He added, "If they can garner their multiples and grow production, the stock could be $7." On September 13, the stock was trading for $4.45.
In the uranium sector, Lauzon likes exploration company, Rockgate Capital Corp (RGT-T). The stock recently pulled back from $1 on the dilution when they raised capital for their drill program. He thinks the stock is still worth $1 despite that. The drill results should be out next month.
REPORT CARD
2/3 of Lauzon's three past top picks from October 5, 2009, have performed well.
Bonterra Energy Corp. (BNE-T) is up 61%; One of the first acquirers of Pembina Cardium. Have some of the best lands. Have always increased dividends. Still a buy. (Lauzon)
UraniumOne (UUU-T) is up 31%. Asset base is focused in Kazakhstan where there is very strong uranium production growth. Russians have a controlling interest, which he prefers over the Kazakh government. Paying $1 special dividend late this year or early next. NAV is $3-$3.25 so there is still very good short-term upside.(Lauzon)
Queenston Mining (QMI-T) is down 34% since discussed. A gold company. Didn't execute on the amount of ounces he expected. Trimmed some of his position.
Robert F. Lauzon is Managing Director, Trading of Middlefield Capital Corporation.
Data: Stockchase.com
