Jamie Murray Arc Resources Ltd ARX-T BUY Aug 27, 2024

He focuses on the top third of relative price performers in a group. The best companies tend to keep getting better. Good dividend plus dividend growth.

He's sort of like an inventory manager with the 20-30 stocks in client portfolios. His job is to own inventory that people care about today. He focuses on themes that he thinks are in the process of being revalued favourably, and perhaps in sectors that are less owned but showing something changing for the better. He's looking for the best company he can find, with no fundamental risks if it doesn't happen immediately, but where the multiple will start to expand if people look more closely at the group.

Leading Montney operator and low-price producer for natural gas. Great balance sheet, especially important because he thinks financing costs are going to keep rising. Great 3-year dividend growth of over 35%. Catalyst is the opening up of the LNG markets globally. Another positive change is the ramping up of Attachie over the next 4 years. Demand for power will fuel demand for nat gas. Rising price for nat gas + increased multiple could = significantly higher share price. Yield is 2.58%.

Nat gas prices will go up, based on European demand for Canadian gas. Is a long-term play. Is the best in this group. Has made money for him in recent years. Is one of his few long-term holds.

He'd skew toward this one. Best-run intermediate O&G company in Canada. On most fundamental metrics, WCP is cheaper. It depends on your own investing style. He's often willing to pay up for management that he considers superior. In a 5-10 year timeframe, you can't go wrong with either.

Near the bottom of a trading pattern. Uptrend. Hitting a bit of resistance, but touching the longer-term trendline. The lows are getting higher, nothing's breaking down. He just added another 2% to his position. Decent dividend yield of 2.82%.

Price of nat gas should improve because of demand. Lots more energy needed for data centres. CEO gets full credit for improving growth over the past 5 years; got rid of debt, ramped up production, initiated share buybacks. Led by a strong CEO, can continue to do well going forward.

One of the top beneficiaries of the LNG market. Just started shipping overseas, and this will grow over time. Improving ROC last couple of quarters. Valuation is 6.4x EV/EBITDA, not worrisome. If you believe in LNG, this is your go-to name.

3-year CAGR is 17%, 1-year is 21% including dividends. Yield is 2.7%, low payout ratio, dividend is growing.

Weakness in gas price over the summer and with condensate prices (which are tied to oil production). Stepping in here for new clients or for those who want more. Likes the steady and methodical management team. Does acquire, but main focus is organic growth.

(Note the short timeframe.)  He even bought a bit more. Hasn't broken key support levels; so as long as it doesn't, he's OK. Nat gas demand for AI is huge. There's also cloud computing, population growth, and general energy usage. Lots of reasons that nat gas has a future, but near term it's subject to trading swings.

Check out his blog for the story on natural gas, and ARX is part of that story.

Temperatures are starting to moderate, and nat gas prices are down. Overproduction in US. Ramp-up of LNG Canada slower than expected, but should be picking up. 

She's actually buying more of this one for clients, not trimming. Embedded growth via inventory through reserves. Likes that a lot of its prices are hedged to higher international gas prices (instead of Canadian). Doesn't need to acquire to fund growth, whereas TOU does.

If she were going to own 2 names, she would also own TOU. But she doesn't. ARX is first in the pecking order. If you have the patience perhaps hold onto TOU a bit longer, as we are getting into the colder months.