Craig Porter, senior portfolio manager at Front Street Capital

Focus: Resource stocks
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TOP PICKS

TOURMALINE OIL (TOU.TO)
The company is run by one of the best management teams in the energy patch (who also own 25 per cent of the company.) Since starting the company in 2009, they have built their production up to around 200,000 BOE (barrels of oil equivalent) per day. They recently re-acquired assets from Shell that had been sold by their previous company, which should take corporate production up to 320,000 BOE per day by 2018. Management has also done an exceptional job at bringing down well costs, having seen a 30 to 40 per cent drop in drilling and completion costs over the last year, enabling a number of their plays to become more economic than most U.S. shale plays.

SEVEN GENERATIONS ENERGY (VII.TO)
A similar story as Tourmaline, Seven Generations is a high-growth company that produces liquids-rich natural gas out of the Montney formation. Their properties are south of Grand Prairie, Alberta. Their production is forecast to be around 180K BOE per day in 2017. Due to cost containment and the high liquids content of their natural gas, the company’s Nest play is one of the lowest-cost supplies in North America. Due to their strong balance sheet, the company recently acquired a large land package in their core area off Paramount Resources for a little under $2 billion, which will help fuel future growth.

NEVSUN RESOURCES (NSU.TO)
The company has been operating the Bisha Mine in Eritrea for the last five years, spinning out a lot of cash. They are currently entering the zinc-rich part of the deposit, which is the base metal that we feel has the best fundamentals in the near term. They recently bought Reservoir Minerals, who owned a high-grade copper-gold deposit in Serbia, which they will develop into a mine with the help of the cash flow from their existing property. The company pays a dividend of a little over five per cent.
 

PAST PICKS: SEPTEMBER 12 2016

TOURMALINE OIL CORP. (TOU.TO)

• Then: $36.80
• Now: $37.59
• Return: 2.14%
• TR: 2.14%

WHITECAP RESOURCES (WCP.TO)

• Then: $10.56
• Now: $11.82
• Return: 11.93%
• TR: 12.41%

TORC OIL AND GAS (TOG.TO)

• Then: $7.88
• Now: $8.05
• Return: 2.15%
• TR: 2.67%

TOTAL RETURN AVERAGE: +5.74%