The price of crude oil enjoyed a 20% spike from Jan. 28 to Feb. 3 and resumed a mini-uptrend over the past couple days. The Canadian dollar has bounced along with it, rising from a six-year low of 78.5 U.S. cents on Jan. 30 to 80.5 on Feb. 3.

Is this a durable recovery?

Oil’s rally has inspired some hope that the seven-month rout has come to an end, but excess supply, growing inventories and slack demand suggest the situation hasn’t yet turned. 

And the Bank of Canada, alarmed by the potential impact on domestic growth of drastic cuts in investments by exploration and production companies operating in western Canada, surprised the market with its first rate move since September 2010. The 25-basis-point cut is intended to offset the impact of lower crude prices.

The weight of the evidence continues to support softer crude prices and a weaker loonie. 

That’s the main theme of this month’s Best Buys feature, which includes two new additions to the CE Portfolio that will benefit from a weaker loonie.

New Conservative Holding Algonquin Power & Utilities (TSX: AQN, OTC: AQUNF) owns interests in renewable power generation and regulated utilities, with more than 60% of total revenue coming from the U.S. This provides a strong foundation for dividend growth, and management is focused on expanding its regulated revenue in the U.S.

New Aggressive Holding New Flyer Industries (TSX: NFI, OTC: NFYEF) makes and services buses for, among others, municipal transit systems in Chicago, New York, San Francisco and Orange County, California. The improving U.S. economy supports expanded funding programs for public transit systems.

This month’s In Focus feature explores the impact of crude’s collapse on sentiment toward and prospects for Canada’s Big Six banks.

The sell-off has hit the Big Six hard, to the point where we see long-term value based on the group’s history of stability, operating efficiencies and, crucially, dividend growth.

As we note in Portfolio Update, three Holdings reported earnings over the past month. And all three announced dividend increases.

WestJet Airlines Ltd. (TSX: WJA, OTC: WJAFF), which we added to the Aggressive Holdings in the January 2015 issue, posted strong fourth-quarter and full-year 2014 results and raised its payout by 16.7%. Conservative Holding Brookfield Renewable Energy Partners (TSX: BEP-U, NYSE: BEP), one of our Best Buy picks in December 2014, reported another set of consistent numbers for the 2014 fourth quarter and boosted its distribution by 7.1%.

Fellow Conservative Holding Shaw Communications’ (TSX: SJR/B, NYSE: SJR) expanding business network and infrastructure services operations should support continued dividend growth along the lines of the 7.7% increase announced along with fiscal 2015 first-quarter results.

We await word on fourth-quarter results for our five Oil & Gas Aggressive Holdings, which we’ll detail in the March Portfolio Update.

This will be the first opportunity to gauge the impact of crude’s collapse on financial metrics.

We’re unlikely to see a V-shaped recovery for oil prices. But stability right now would be plenty helpful.

Investors with a long time horizon would do well to buy E&Ps with strong management teams, strong balance sheets and strong records of execution.

That list includes Aggressive Holdings ARC Resources Ltd. (TSX: ARX, OTC: AETUF), Crescent Point Energy Corp. (TSX: CPG, NYSE: CPG), Peyto Exploration and Development Corp. (TSX: PEY, OTC: PEYUF) and Vermilion Energy Inc. (TSX: VET, NYSE: VET).

In Closing

Please let us know what you think about the service or post any questions you may have to the Stock Talk forum at www.CanadianEdge.com. We’ll be sure to post a reply within 24 hours.

And be sure to join me for the next installment of my monthly online chats with subscribers on Wednesday, Feb. 25, 2015, at 2 pm.

Go to www.InvestingDaily.com/Canadian-Edge/live-web-chats/ for more information and to sign up to receive an e-mail notification for the event.

I stick around to answer just about every question asked, so if there’s something on your mind that’s not addressed in an issue or on the Stock Talk forum, this is a great opportunity.

And thanks for reading Canadian Edge.