Keith Chiasson is Senior Vice President, Downstream of Cenovus Energy Inc. Mr. Chiasson is responsible for optimizing the price Cenovus Energy receives for its products through marketing, transportation and refining. This includes all commercial activities associated with crude oil, diluent, natural gas, natural gas liquids and other hydrocarbon products produced or acquired by the company. Mr. Chiasson also manages Cenovus’ interest in its refining joint venture and is responsible for the Bruderheim rail terminal. In addition, he oversees supply chain management across the company’s operations. Mr. Chiasson joined Cenovus in 2016 to lead oil sands production operations. He’s a mechanical engineer with more than 20 years of experience in the oil industry, primarily with Imperial Oil and ExxonMobil.
In this exclusive 2,177 word interview with the Wall Street Transcript, Keith Chiasson demonstrates the complexity of managing both and oil and gas production company as well as the downstream refinery and shipping business.
“…We’re also a 50% owner in two refineries in the U.S., a joint interest owner with Phillips 66. Those refineries have refining capacity of 480,000 barrels a day, with a net to Cenovus of 240,000 barrels a day. And in 2015, we purchased the Bruderheim Energy Terminal, which is a crude-by-rail loading facility in Alberta, and it’s part of our strategy to create additional transport options for our products to capture global prices for our oil.”
Mr. Chiasson is proud of his company’s ability to deliver on its projections:
“Our number-one priority was to deleverage our balance sheet, which we’ve made significant progress on over the past year, and we’ll continue through 2019 reducing our net debt position. I think it’s very impressive when you think of a sustaining capital reduction of 70% from 2014 to 2018, and those costs are essentially locked in because it was structural changes to how we sustain that production.
And then also, being an industry leader in unit operating costs as well as SORs — steam-to-oil ratios — really positions the company well to take advantage as light heavy oil prices improve over time. This company has significant capability to generate free funds flow at commodity prices that we’re seeing today.”
Get the full 2,177 word interview in the Wall Street Transcript and get the complete, verbatim picture.
Anthony Marino, President and Chief Executive Officer of Vermilion Energy Inc., is an accomplished senior executive with a proven track record of high shareholder returns during his 36-year career in the energy industry. Mr. Marino joined Vermilion in 2012 as Chief Operating Officer, was named President in 2014 and Chief Executive Officer in 2016. He joined Vermilion’s board of directors in 2016. Prior to joining Vermilion, Mr. Marino held the position of President and Chief Executive Officer of Baytex Energy Corporation, after initially serving as Baytex’s Chief Operating Officer. Previously, Mr. Marino held the role of President & Chief Executive Officer of Dominion Exploration Canada Ltd., a division of Dominion Resources Inc.
In this exclusive 3,290 word interview in the Wall Street Transcript, Mr. Marino details the investment opportunities for his company:
“…We have always had a tremendous focus on capital efficiency. That is very important in a capital-intensive business like oil and gas. It allows us to pay a dividend and to grow the company with internally generated cash flow. So we end up with what I think is a very attractive equity security for investors: a monthly dividend, which has been increased four times over the history of the company and has never been reduced.”
The company has an unusual production footprint:
“…In 1997 we began what has been a very long and successful international diversification by becoming an oil producer in France, and we now dominate the domestic oil production industry there. We continued to grow and expand the company internationally by entering the Netherlands in 2004. We are now the second-largest gas-producing company in onshore Netherlands. We entered Australia in 2005 and Ireland in 2009. We now operate the gas field in Ireland that makes up almost all of Ireland’s domestic gas production. We listed on the NYSE in 2013, so now we’re interlisted, on the TSX and NYSE.
In 2014, we acquired production in Germany and in the United States in Wyoming. And over the last few years, from 2014 to 2017, we set up a business in central and Eastern Europe. We’re now the largest oil and gas landholder in Croatia, we produce in Hungary, and we’re the number-two landholder in Slovakia.”
This leads to pricing power that is rarely seen in the Oil & Gas sector:
“…Our European gas is extraordinarily high priced compared to North America. Today, the price for natural gas in Europe is about 2.5 times what it is in the United States, and it’s a very, very significant multiple of the gas price in Canada. So this is a real differentiating factor.”
To find out more about Anthony Marino and his unique oil & gas production strategy, read the entire 3,290 word interview in the Wall Street Transcript.
Noah Barrett is a Research Analyst at Janus Henderson Investors and lead on the firm’s energy and utilities research team. Prior to joining Janus in 2015, he served as Vice President with Institutional Capital LLC, specializing in analysis and stock recommendations for the energy and transportation sectors. Mr. Barrett’s experience also includes working as an equity research analyst with Fiduciary Management Associates LLC and as an associate in the credit risk management department at Morgan Stanley.
In this exclusive 3,072 word interview with the Wall Street Transcript, Noah Barrett reveals the investment recommendations he thinks will work best in 2019. His analysis is based on a body of work from his team:
“One thing we pride ourselves on is doing a lot of in-depth, grassroots research, and we feel our edge is understanding the companies, their business models and management incentives better than our peers.”
The oil price for sustainable free cash flow has dropped, creating an opportunity for investors:
“Specific to the E&Ps, one thing that we’re focusing on are E&Ps that can deliver free cash flow at some reasonable oil price, and we define reasonable as $50 WTI. If companies can set their budgets at $50 WTI, grow production at some high-single-digit, low-double-digit rate while spending within cash flow and, more importantly, generating some excess cash flow, I think those companies will be rewarded in the market. Three to four years ago, you’d be surprised if any U.S. onshore E&P could generate free cash flow at $50 WTI, but I do think there are some companies today that can actually deliver on that promise.”
One pick among many is EOG:
“In E&P, my favorite name is EOG Resources (NYSE:EOG). It’s always been viewed as a best-in-class E&P and, as a result, has usually traded at a notable multiple premium to its peer group. Recently, that relative premium has compressed quite a bit, and I see an attractive entry point to buy a best-in-class E&P that’s trading at a slight premium to peers versus its historical average. We like a lot of things about EOG, including its strong track record of operation excellence and the company’s differentiated culture.”
To get all the picks, and Noah Barrett’s complete picture of the Oil & Gas Sector, read the entire 3,072 word interview in the Wall Street Transcrpt.
Pavel Molchanov is a Senior Vice President and Equity Research Analyst at Raymond James & Associates, Inc. He joined the firm in 2003 and began work as part of the energy research team, becoming an analyst in 2006. He initiated coverage on the alternative energy/clean technology sector in 2006, followed by the integrated/multinational oil and gas sector in 2009. Mr. Molchanov has been recognized in the StarMine Top Analyst survey, the Forbes Blue Chip Analyst survey and The Wall Street Journal Best on the Street survey.
In this exclusive 1,982 word interview with the Wall Street Transcript, Pavel Molchanov details his top picks for 2019 and his reasoning behind them:
“Our forecast is that oil prices 12 months from now will be approximately 50% higher than where they started 2019, and we anticipate that, on a full-year basis, 2020 will mark the cyclical peak for oil prices.”
Mr. Molchanov is not shy about sharing his negative calls:
“Exxon, by its nature, has an asset base that is not well-positioned in the context of rising oil prices. When oil prices go up, the rising tide lifts all boats, but Exxon would tend to be one of the least exciting ways to play an oil recovery. It’s the world’s largest refiner. It’s the world’s third-largest chemical company. It’s also a major player in North American and European natural gas where, as I mentioned, economics are quite different from oil.
And so if our bullish oil forecast proves out, then Exxon’s earnings would have less upside relative to just about anybody else in the peer group…”
And he has several top picks to share with investors, including:
“On the large-cap side, Occidental Petroleum (NYSE:OXY). On the spectrum of E&P companies, Occidental is on the defensive side, but for investors who are looking for some income, this is one to look at. The dividend yield is 5%, which is the highest of any U.S. E&P company, but this is also a growth company largely because of its Permian Basin assets.”
To get all of the Pavel Molchanov’s Oil & Gas Sector insights, read the complete 1,982 word interview in the Wall Street Transcript.
Rick Weiss is Chief Bank Strategist of Ambassador Financial Group. Mr. Weiss joined Ambassador Financial Group in 2015 as Managing Director, Head of Investor Relations. Selected by Forbes and Starmine in 2015, 2010 and 2006, Mr. Weiss is recognized as one of the top stock-pickers for the thrift and mortgage finance industry. He was also named by The Wall Street Journal as “Best on the Street.”
In this exclusive 2,018 word interview in the Wall Street Transcript, Mr. Weiss describes in detail the current market for US community banking and whether you should invest.
One of the largest strategic issues confronting community banks is their access to technology:
“Over the long term, it is easy to see that community banks will resemble a financial technology company with a bank charter, rather than continuing to operate as a traditional community bank that uses financial technology simply as another delivery system to engage local customers.”
An upside is noted for those banks that can successfully merge into an existing asset base:
“Attracting core deposits is easier said than done. In some cases, banks that cannot grow organically will attempt to gain better funding through mergers and acquisitions…An example of a bank that is experienced with acquisitions and has had success with integration is OceanFirst Financial Corp.(NASDAQ:OCFC) of New Jersey.
OceanFirst recently announced another deal, which is their fifth in four years. It seems like a lot, but they have managed to keep the right people and keep earnings moving forward. That would be just one example of an acquisition strategy that works well.”
Regulatory challenges also concern Mr. Weiss:
“…The new accounting standard, the comprehensive expected credit losses, or CECL, which is going to require banks to establish loss reserves for potential losses over the contractual life of the loan. The current accounting is the incurred loss model. CECL will take effect in 2020 and is designed to produce higher loss estimates and higher reserves. So what happens in 2020 if the credit cycle turns sour?”
Read the entire 2,018 word interview in the Wall Street Transcript.
Anthony Polini is the Director of Research at American Capital Partners, LLC where he specializes in the banking industry. Mr. Polini was previously a sellside analyst at Raymond James Financial. Prior to that, he served at Midwest Research, A.G. Edwards and Prudential Securities.
He has received numerous professional accolades and has been frequently quoted by the press. He has appeared regularly on CNBC, as well as various TV news and business programs. He earned his B.A. in psychology and philosophy from the University of Pennsylvania and has an MBA in finance from St. John’s University.
In this 2,405 word interview, exclusive to the Wall Street Transcript, Mr. Polini reveals a strategy for maximizing returns from bank stocks:
“We have had a dramatic selloff on the FANG — Facebook (NASDAQ:FB), Amazon (NASDAQ:AMZN), Netflix (NASDAQ:NFLX), Google (NASDAQ:GOOG) — stocks, which tended to be stabilizers at least for the past few years, even when the broad market has pulled back. Select few stocks have carried the market forward. At the end of the day, we have a typical cyclical move now where the banks are dramatically underperforming. They have underperformed every quarter this year. ”
This pullback has exposed two important bank stock opportunities:
“We only have two strong “buys.” One was actually doing well recently until the market fell apart, and that is New York Community (NYSE:NYCB). The other one is Lakeland Bancorp (NASDAQ:LBAI), which is a small-cap bank with excellent fundamentals and high takeover appeal. New York Community is a special situation in that it had substantial regulatory relief in 2018, and that does bode well for its ability to not only grow the balance sheet but to participate in M&A activity.”
Get the entire detail on these upside opportunities and more by reading the entire exclusive 2,405 word interview with Anthony Polini in the Wall Street Transcript.
Steven M. Klein is President and Chief Executive Officer of Northfield Bancorp. Mr. Klein is responsible for strategic planning and execution leadership, as well as the overall operations of Northfield including lending, deposit gathering and branch operations. Prior to joining Northfield, Mr. Klein was an audit partner in the New Jersey community banking practice of KPMG LLP.
In this exclusive 3,003 word interview in the Wall Street Transcript, Mr. Klein highlights the challenges of banking at this point in the economic cycle and the unique sustainable competitive advantages of Northfield Bancorp.
“Right now, one of the challenges is lower loan demand combined with a high level of competition from banks in the marketplace. If you look at a number of third-quarter earnings releases — and, in fact, a number of banks posted projections for 2019 — they are not modeling significant loan growth.
We are in the later stages of the economic cycle, combined with a rising rate environment, so we are just not seeing the same level of demand. For the most part, I would say pressure on net interest margins was a general theme of the third quarter in that the amount you were earning on your assets compared to what you are paying on your deposits was tightening.
It is a challenge for Northfield right now and for the industry in general.”
Mr. Klein also highlights the burdensome tax regime of New Jersey as an obstacle to growth:
“We continue to see buildings purchased and sold, loans refinanced and people investing in their business. As I mentioned, we are not in residential lending. Right now, if you look, especially in our region, at tax reform, it has had a negative impact on the amount of interest and state and local taxes that can be deducted. I can’t see how this won’t have a negative impact on residential lending in the region.”
To get the full picture from Steven Klein, read the exclusive 3,003 word interview in the Wall Street Transcript.
Ira D. Robbins is President, Chief Executive Officer and Director of Valley National Bancorp. Mr. Robbins joined Valley Bank in 1996 as part of its Management Associate Program and has held several key positions throughout the bank for over 20 years. In 2009, he was awarded the title of First Senior Vice President and Treasurer and then was promoted to Executive Vice President in 2013.
In 2016, Mr. Robbins was recognized for his invaluable contributions to the bank’s growth with a promotion to Senior Executive Vice President. In 2017, he was appointed as President of Valley National Bank and assumed the role of CEO in 2018.
In this exclusive 3,252 word interview in the Wall Street Transcript, Mr. Robbins reveals the secret to his success:
“…It is important for us to enable local decision-making while maintaining centralized underwriting and operations to ensure that there is one credit culture and one operating philosophy across the entire organization.
We want to provide customers with the unique touch and feel that he or she would want based on local relationships. It is something we spend a lot of time on to make sure we have empowered customers and employees who have the tools and data necessary to make important decisions.”
The bank has expanded dramatically into regions other than the tax burdened New York and New Jersey area:
“…From an economic-trend perspective, the Florida region is definitely growing from a GDP and population perspective to a much more varying degree than is our core historic New Jersey and New York footprint. The tax implications are different in these Northeastern markets versus what they are in Florida.”
To get the rest of the detail on how a local bank can thrive at this point in the economic cycle, read the entire exclusive 3,252 word interview with CEO Ira Robbins in the Wall Street Transcript.
Richard Xavier Bove is the Chief Financial Strategist at Rafferty Capital Markets. Mr. Bove began his career on Wall Street as a retail salesperson at legacy Eastman Dillon Union Securities in late 1965. He joined Wertheim & Co. in 1971 as an analyst covering the building and banking industries.
Later, Mr. Bove became the Director of Research at C.J. Lawrence and Raymond James. In the mid-1980s, he returned to the analytical profession as a banking and financial analyst serving at Raymond James, Dean Witter Reynolds, Lehman Brothers and Ladenburg Thalmann, among other firms in his 53 years in the industry.
In 2013, Mr. Bove joined Rafferty Capital Markets. In 2018, he was selected to be the firm’s Chief Financial Strategist. Mr. Bove has been interviewed on television over 1,500 times and his print interviews now number over 10,000. His views have been reported on in Europe, Asia and Latin America. He holds a bachelor’s degree from Columbia College where he graduated in 1962. He has been married 52 years and has seven children and 21 grandchildren.
In this 4,884 word interview exclusive to the Wall Street Transcript, Richard Bove reviews the current state of banking at this point in the economic cycle:
“For the past 12 to 18 months, my position has been relatively negative. I have not wanted to buy bank stocks, and at this moment, I still do not want to commit to the industry. I am concerned about money availability, money costs, loan quality and, most important by far, the ability to generate increased sales.”
The cause for concern is well-founded:
“Higher interest rates have a very negative impact on the value of financial assets. The latest quarterly report from the Federal Reserve indicates that, if it marked its securities portfolio to market, it would have had to lower the value of these securities by $66.5 billion, wiping out the $39.5 billion that is the Fed’s equity. In theory, the Fed is insolvent because it has no real equity.
Banks must deal with the same issue.”
To read the rest of this 4,884 word interview, click here to see it on the Wall Street Transcript.
Laurie Havener Hunsicker is Managing Director and Research Analyst at Compass Point Research & Trading LLC. Ms. Hunsicker is a Managing Director and senior equity analyst at Compass Point Research & Trading covering small regional banks, community banks and thrift conversions, with a geographic focus on the Northeast, Mid-Atlantic and Hawaii.
She is well-known in the financial services investment community for providing in-depth, fundamental analysis and equity research with a career as a senior equity analyst that spans 28 years. Ms. Hunsicker has received more Top Stock Picking Awards of Excellence by Thomson Reuters/StarMine in both the categories of Thrifts & Mortgage Finance and Banks, combined, than any other U.S. equity sellside analyst since StarMine started publishing awards in 2002.
In this 3,491 word interview, exclusive to the Wall Street Transcript, Laurie Havener Hunsicker explores the current state of bank stocks, and reveals her top picks.
“If I look at our names again, prior to our downgrade, we had 18 “buys,” and now we are at 11. We had six “neutrals,” and we are now at nine “neutrals.” We had zero “sells,” and now we are now at four “sells.” When we look more broadly, some of the dividend yields on these stocks are huge. Of our “buy”-rated stocks, I have two stocks that are yielding over 4% at the moment, and that is also attractive.”
There are few times when a equity analyst with 28 years of experience uses the word “love” when referring to a stock pick:
“To start off, there is absolute love for the Hawaii banks. Starting alphabetically, Bank of Hawaii (NYSE:BOH) is a $3 billion-market-cap stock that we have “buy”-rated. It is currently trading at 2.4 of tangible book and 11.5 times our 2020 estimate. BOH is a $17 billion bank with a very high ROTCE that is sitting upward of 18%.
When we look at how this bank performed during the last crisis, it was virtually unscathed. It has a very attractive dividend yield here at 3.5%. It actively buys back. In fact, in the last quarter, it bought back almost 300,000 shares at $83. The stock is sitting today at $71.
We believe there is a lot of directional reason to own BOH. And deposit franchise has become increasingly important, as we have seen rates go up.”
To see the rest of the analysis for Bank of Hawaii and all the other banks the award winning Laurie Havener Hunsicker recommends, read the entire 3,491 word interview in the Wall Street Transcript.
