Opinions Eric Nuttall
Arc Resources LtdARX.TOCOMMENTOct 11, 2019
Eric NuttallStock price when the opinion was issued
As of Jun 11, 2026. Market Open.
You might be interested:
She will sell before the deal is done to avoid the foreign exchange. She prefers other energy names. The deal is 75% Shell stock and 25% cash, but this is a moving target, depending on the price of Shell stock.
Rebecca TeltscherWhether to sell now or hold depends on your tax situation. A decent amount is coming via SHEL shares (a more tax-efficient way to get your proceeds). SHEL is quite different from ARX, and an investor will have to decide if they like SHEL prospects.
Usually in these situations, his team doesn't wait until that last extra drop of return. They like to get their money and put it to use again.
Deal means roughly $8 a share in cash, rest as pro-rated SHEL shares. If you own ARX in a registered account, your capital gain is not taxed. If you own it in a taxable account, you'll be dealing with any consequences in March 2027.
You'll have to look at the cost base on the SHEL shares you receive. Best advice is to use a tax professional.
Simplest approach is to redeploy capital into one of the stronger energy holdings such as CNQ.
Or put your $$ into an ETF like XEG for diversified exposure. Her team often parks money in a parking spot like this as they do their due diligence on a particular name. Keeps your exposure in the sector until you find a favourite name.
Another option is to look internationally, as Canadian portfolios tend to be heavy on the home bias.
No need to redeploy right this minute. She wouldn't be surprised to see more volatility and another selloff in the next few weeks. Be patient, and wait for a good entry point.
He's not an M&A expert, and he hasn't fully evaluated the deal. The government has to give its stamp of approval when a foreigner comes in to buy a Canadian company. Looking at market behaviour, seems to be some bit of doubt that this deal will go through. He expects it will happen.
If it fails, this stock will come back to the mid-$20s.
Engineering issues, and market's moved away. His firm is willing to look through those and buy at these levels. Longer term, uniquely positioned on natural gas and condensate.
Using FCF to buy back shares, which is smart given where the share price is. Yield is ~3%, with visibility to growing it.
Ryan BushellIt's been lucky with the macro. Still struggles with Attachie, which was the growth platform -- take out that project, and the name becomes much gassier. He's frustrated with the gas macro in NA.
Hopeful that Attachie will get sorted out. He's meeting with management in a couple of weeks for an update. Still reasonable upside of ~40%.
If you own, consider selling for some better names in the short term.
Eric Nuttall
They reported earnings a few weeks ago. Decent earnings, but withheld guidance of a new project. Shares dropped 10%, which was way overdone. This new project still has value. Patience will be rewarded. Is adding on this weakness.
(Analysts’ price target is $28.23)Rebecca Teltscher
Market Outlook TOU-T is planning to spin off some of their infrastructure into a royalty like offering, while retaining 80% of the value. Prior to this the stock was trading at all time lows and the market was giving zero value to the infrastructure they held. The company was trading at 3 times cash flow. The assets they are effectively selling are being valued at 9 times cash flow within the offering. This should remind people how undervalued this space is and there are self-adjusting opportunities that will "fix the funk" we see today. ARX-T has a similar 20% of its company in similar infrastructure. Once we get past the upcoming Federal election things should move forward. What a party says on the campaign trail and what happens in reality can be two very different things. The Liberals appear to support the TMX pipeline project in reality and it will ultimately get built, he says. 11% of our GDP in Canada comes from the energy sector.