Declining Canadian Heavy Oil Price Differential Key to Expanding Stock Valuations: Detailed Investment Methodology Discussed in this Exclusive Interview with Mary Throop and Kevin Elliott, Partners at Summerhill Capital

Wall Street Transcript

67 WALL STREET, New York - February 12, 2013 - The Wall Street Transcript has just published its Investing in Canada Report. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Investing in Canada - Long-Term Investing - Canadian Dollar Investing - Value Investing

Companies include: Wal-Mart Stores Inc. (WMT), Baytex Energy Trust (BTE), Canadian Natural Resources Lim (CNQ), The Bank Of Nova Scotia (BNS), Toronto-Dominion Bank (TD), Royal Bank of Canada (RY) and many others.

In the following excerpt from the Investing in Canada Report, two award winning asset managers discuss their methodology for selecting securities for their portfolios:

Mr. Elliott: One of the big potential trades in Canada in 2013 will reflect what's going on with the heavy oil differentials. Canada, as you know, has a lot of tar sands operations and heavy oil operations, which in the immediate past have had relatively limited export capacity due to the dearth of pipelines that can deliver this oil down to the U.S. refiners, as well as pipelines to deliver this oil to the west coast or east coast of Canada to be able to export it offshore. So the made-in-Canada oil price has been at a huge discount to the international global price for oil. As these transportation bottlenecks begin to be resolved, we would expect this differential to be eliminated over time. It may not happen in the near future, but over the course of the next year or multiple years, we expect to see that happen. And why it's interesting is the heavy oil producers in Canada are trading at record low valuations that we haven't seen in 30 years. So I think names like Baytex (BTE) and Canadian Natural Resources (CNQ) have an interesting opportunity. We'll see what happens later this year, but if we do see this differential start to close, these stocks could appreciate rather substantially.

Ms. Throop: And in the case of a company like Baytex, you get paid to wait, because they have a very good dividend yield which is quite sustainable, as they are hedged on prices...

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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